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Simple English definitions for legal terms
Smoot–Hawley Tariff Act
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A quick definition of Smoot–Hawley Tariff Act:
The Smoot-Hawley Tariff Act was a law passed in 1930 that made it more expensive to import goods into the United States. This made other countries angry and they raised their own tariffs, which hurt the global economy. Many people believe that this law helped cause the Great Depression, a time when many people lost their jobs and businesses failed.
A more thorough explanation:
The Smoot–Hawley Tariff Act was a law passed in 1930 that increased the rates of tariffs on most goods imported into the United States. This law caused other countries to respond with similar tariff increases, which led to a decrease in international trade. The Act is often blamed for contributing to the Great Depression.
For example, if a foreign company wanted to sell their products in the United States, they would have to pay a higher tax to do so. This made it more expensive for them to sell their products in the US, which made them less likely to do so. As a result, American companies had less competition, but consumers had fewer choices and higher prices.
The Smoot-Hawley Tariff Act is an important example of how government policies can have unintended consequences on the economy and international relations.