The Smoot-Hawley Tariff had a significant impact on the economy:
1. It contributed to a large reduction in trade: The Smoot-Hawley Tariff, enacted in 1930, increased tariffs on thousands of imported goods, leading to other countries imposing their tariffs in retaliation. This escalation of trade barriers reduced international trade and worsened the Great Depression.
2. It did not increase consumer purchasing power: Instead of boosting purchasing power, the tariff led to higher prices for imported goods, making them less affordable for consumers. This could have potentially reduced purchasing power for consumers.
3. It did not contribute to an economic boom: The Smoot-Hawley Tariff is generally seen as having a negative impact on the economy due to the trade wars it triggered and its contribution to the deepening of the Great Depression.
4. It encouraged overproduction of goods: The tariff did not encourage overproduction but rather hindered global trade, leading to reduced demand for goods and contributing to economic hardships during the Great Depression.
