THE SMOOT-HAWLEY TARIFF - A QUANTITATIVE ASSESSMENT

In the two years after the imposition of the Smoot-Hawley tariff in Ju ne 1930, the volume of U.S. imports fell over 40%. To what extent can this collapse of trade be attributed to the tariff itself versus other factors such as declining income or foreign retaliation? Partial and general equilibrium assessments indicate that the Smoot-Hawley tariff itself reduced imports by 4-8% (ceteris paribus), although the combina tion of specific duties and deflation further raised the effective tar iff and reduced imports an additional 8-10%. A counterfactual simulati on suggests that nearly a quarter of the observed 40% decline in impor ts can be attributed to the rise in the effective tariff (i.e., Smoot- Hawley plus deflation).