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The Smoot-Hawley Trade War

Author

Listed:
  • Kris James Mitchener
  • Kirsten Wandschneider
  • Kevin Hjortshøj O’Rourke

Abstract

We document the outbreak of a trade war after the U.S. adopted the Smoot-Hawley tariff in June 1930. U.S. trade partners initially protested the possible implementation of the sweeping tariff legislation, with many eventually choosing to retaliate by increasing their tariffs on imports from the United States. Using a new quarterly dataset on bilateral trade for 99 countries during the interwar period, we show that U.S. exports to countries that protested fell by between 15 and 22 percent, while U.S. exports to retaliators fell by 28-33 percent. Furthermore, using a second new dataset on U.S. exports at the product-level, we find that the most important U.S. exports to retaliating markets were particularly affected, suggesting a possible mechanism whereby the U.S. was targeted despite countries’ MFN obligations. The retaliators’ welfare gains from trade fell by roughly 8-17%.

Suggested Citation

  • Kris James Mitchener & Kirsten Wandschneider & Kevin Hjortshøj O’Rourke, 2021. "The Smoot-Hawley Trade War," Oxford Economic and Social History Working Papers _188, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:esohwp:_188
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    Cited by:

    1. Alan de Bromhead & Kevin Hjortshøj O'Rourke, 2024. "Should history change the way we think about populism?," Economic History Review, Economic History Society, vol. 77(3), pages 1086-1109, August.
    2. Toptancı, Ali İskan, 2021. "RETRACTED PAPER: "Macroeconomic effects of the trade wars: Smoot-Hawley Protectionism Tariff"," EconStor Preprints 232553, ZBW - Leibniz Information Centre for Economics.
    3. Marek Dabrowski, 2024. "The Risk of Protectionism: What Can Be Lost?," JRFM, MDPI, vol. 17(8), pages 1-24, August.
    4. Furceri, Davide & Ostry, Jonathan D. & Papageorgiou, Chris & Wibaux, Pauline, 2023. "Retaliation through Temporary Trade Barriers," CEPR Discussion Papers 17853, C.E.P.R. Discussion Papers.
    5. Bernardo Candia & Mathieu Pedemonte, 2025. "Export-Led Decay: The Trade Channel in the Gold Standard Era," Journal of the European Economic Association, European Economic Association, vol. 23(3), pages 1173-1201.
    6. Mitchener, Kris & Wandschneider, Kirsten, 2025. "Trade wars and currency wars: Lessons from history," Kiel Policy Briefs 189, Kiel Institute for the World Economy (IfW Kiel).
    7. Lampe, Markus & O’Rourke, Kevin Hjortshøj & Reiter, Lorenz & Yotov, Yoto V., 2025. "The Empire project: Trade policy in interwar Canada," Journal of International Economics, Elsevier, vol. 153(C).
    8. Mario Holzner, 2025. "FIW-PB 67 (Customs) unity as strenght: How the EU and its partners can respond to tariff threats," FIW Policy Brief series 67, FIW.

    More about this item

    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative

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