Abstract: We document the outbreak of a trade war after the United States adopted the Smoot-Hawley tariff in June 1930. U.S. trade partners initially protested, with many eventually choosing to retaliate with tariffs. Using a new quarterly dataset on bilateral trade for ninety-nine countries, we show that U.S. exports to retaliators fell by 28%–32%. 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 United States was targeted despite most-favoured-nation obligations. The retaliators’ welfare gains from trade fell by 8%–16%.
Keywords: industrial production, Ireland, historical national accounts
JEL Codes: F13, F14, N70
Cite as: Kris James Mitchener, Kevin Hjortshøj O’Rourke, Kirsten Wandschneider, The Smoot-Hawley Trade War, The Economic Journal, Volume 132, Issue 647, October 2022, Pages 2500–2533, https://doi.org/10.1093/ej/ueac006
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