Question

Based on what you know about the Hawley-Smoot Tariff Act, how can tariffs be both useful and dangerous tools? Give your answer in a short paragraph.

Answer 1

The Hawley-Smoot Tariff Act of 1930 raised tariffs on many imported goods, but then countries that traded with the United States raised their tariffs in retaliation leading to increased prices for US consumers. Tariffs can be useful economic tools that boost the sales of a domestic product, but if other countries start to retaliate it can backfire by raising prices and causing economic problems.

Answer 2

Answer:

Sample Response: Tariffs can be useful to help boost the demand of domestically produced goods. In the short-term, this approach can be good for the nation implementing the tariff because it can improve its production. However, this tactic can negatively impact other countries as the demand for their exports decline, causing a decline in their GDP. As seen with the Hawley-Smoot Tariff Act, countries may retaliate with tariffs of their own, causing global economic issues.