Senator Cantwell on Smoot-Hawley Tariffs and Curbing Presidential Tariff Authority

Commemorating Smoot-Hawley Tariffs

• 📌 Today marks the 95th anniversary of the Smoot-Hawley tariffs, described by the Senate Historical Office as one of the most catastrophic acts in congressional history.
• 💡 The Smoot-Hawley Tariff Act imposed an average tariff rate of 20% on imported goods, aiming to protect US farmers and manufacturers.
• 📉 Instead of bolstering the economy, these tariffs widened and deepened the Great Depression, leading to retaliatory tariffs and consumer boycotts from major trading partners.

Economic Devastation of Smoot-Hawley

• 📊 Retaliatory tariffs and boycotts caused US farm and manufacturing exports to plummet by over 68%, from $5.24 billion in 1929 to $1.6 billion in 1933.
• 📉 The US gross domestic product fell by nearly half, from $104 billion in 1929 to $57 billion in 1932.
• 📈 The national unemployment rate surged from 3.2% to a peak of 23% in 1932.
• ⚠️ In Washington state, a trade-dependent region, lumber exports dropped 70%, and over half of loggers lost their jobs, with the state's unemployment rate reaching 33%.

Lessons for Today's Trade Policy

• ⚡ The current administration's high tariff playbook mirrors the Smoot-Hawley era, creating uncertainty which is detrimental to economic growth.
• 🗣️ Over 1,000 economists warned President Hoover before Smoot-Hawley that tariffs would raise consumer costs, harm farmers and manufacturers, dry up exports, and damage foreign relations.
• 🏛️ The Trade Review Act of 2025, introduced by Senator Grassley and Cantwell, aims to establish limits on the president's ability to impose tariffs, asserting this as a constitutional power of Congress.

Rebuilding a Rules-Based Trade System

• 🌍 Post-World War II, the US led the creation of an open, rules-based international trading system, lowering tariffs and fostering stability for investment and growth.
• 🎯 The resolution calls for affirming a rules-based trade policy that reduces production costs, opens markets for US exports, and encourages trade.
• 🚫 It emphasizes avoiding the repetition of historical policy mistakes and reaffirming Congress's oversight of trade issues.