DURING THE SUMMER OF 1929, as the Senate began considering the House bill, the United States reached a business cycle peak. Over the next four years, the nation would experience an unrelenting economic contraction known as the Great Depression. Although the economic decline began nearly a year before the new tariff took effect in June 1930, many have sought to blame the SmootHawley tariff for turning a recession into a full-blown depression.
Before we can examine this controversial claim, we have to resolve an even more basic dispute about how much the legislation increased tariffs and reduced imports. The Smoot-Hawley tariff is commonly thought to have raised U.S. import duties to absurdly high levels. For example, Gottfried Haberler (1976) suggested that the act pushed tariffs to “skyscraper” heights. Others have said that such statements are an exaggeration. Alfred Eckes (1995)