[Pages S3437-S3438]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

SUBMITTED RESOLUTIONS

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SENATE RESOLUTION 281--COMMEMORATING THE 95TH ANNIVERSARY OF THE
ENACTMENT OF THE TARIFF ACT OF 1930

Ms. CANTWELL (for herself, Mrs. Shaheen, and Mr. Welch) submitted the
following resolution; which was referred to the Committee on Finance:

S. Res. 281

Whereas on June 17, 1930, President Hoover signed into law
the Tariff Act of 1930 (commonly known as the ``Smoot-Hawley
Tariff Act of 1930'');
Whereas the Smoot-Hawley Tariff Act of 1930 raised tariffs
on goods imported into the United States in an attempt to
protect farmers and manufacturers in the United States from
foreign competition;
Whereas the Senate Historical Office has characterized the
passage of the Smoot-Hawley Tariff Act of 1930 as ``among the
most catastrophic acts in congressional history'';
Whereas the sudden and steep increase in tariffs encouraged
retaliation by foreign countries, including major trading
partners such as Canada and countries in Europe, which
responded by raising their own tariffs on goods imported from
the United States, triggering a dramatic reduction in
international trade;
Whereas the resulting retaliatory tariffs contributed to a
substantial decline in farm and manufacturing exports from
the United States, which plummeted from $5,240,000,000 in
1929 to $1,670,000,000 in 1933, a 68 percent drop, according
to records kept by the Bureau of the Census;
Whereas the tariffs contributed to anti-United States
sentiment in foreign countries, leading to consumer boycotts
in Canada, France, Spain, Italy, and other countries;
Whereas the effects of the tariffs and counter-tariffs
contributed to the Great Depression, during which global
trade decreased by as much as 60 percent;
Whereas the effects of the tariffs were amplified by
deflation, causing the gross domestic product of the United
States to fall from $104,600,000,000 in 1929 to
$57,000,000,000 in 1933, according to the Bureau of Economic
Analysis;
Whereas the unemployment rate spiked from 3.2 percent in
1929 to a peak of approximately 23 percent in 1932, before
decreasing slightly to 21 percent in 1933, according to the
Journal of Economic Perspectives of the American Economic
Association;
Whereas, after the tariffs were imposed, the trade surplus
of the United States declined because exports fell more than
imports;
Whereas in 1934 Congress directed the President to reduce
tariff rates applied by the United States and to seek
reductions in tariffs applied to exports from the United
States through the Act entitled ``An Act to amend the Tariff
Act of 1930'', enacted June 12, 1934 (73 Stat. 943, chapter
474) (commonly known as the ``Reciprocal Tariff Act''), and
later Acts that provided the President with trade negotiating
objectives and tariff proclamation authority;
Whereas tariffs were decreased in the United States and
abroad, falling in the United States from a trade-weighted
average of 19.8 percent in 1933 to 6.9 percent by 1950, and
continuing to fall afterwards as a result of multilateral
trade agreements; and
Whereas the United States has since benefitted
substantially from an open and rules-

[[Page S3438]]

based international trading system that promotes innovation
and growth, lowers input costs for goods manufactured in the
United States, reduces consumer prices, supports supply chain
resiliency, and enables the United States to maintain an
export market valued at more than $3,000,000,000,000; Now,
therefore, be it
Resolved, That the Senate--
(1) observes the 95th anniversary of the enactment of the
Tariff Act of 1930 (commonly known as the ``Smoot-Hawley
Tariff Act of 1930'') as a moment of historical reflection on
the consequences of protectionist economic policies;
(2) views the Tariff Act of 1930 as a significant
contributor to the Great Depression;
(3) affirms the importance of rules-based trade policy that
reduces production costs for farmers, manufacturers, and
construction firms in the United States, strengthens
international economic cooperation, helps provide consumers
in the United States with a larger variety of affordable
goods, and opens up vast foreign markets to exports from the
United States; and
(4) commits to encouraging trade and economic policies that
encourage economic growth and avoid the repetition of
historic policy mistakes.
Ms. CANTWELL. Mr. President, I am here too to focus on some history
and a resolution. Today is the 95th anniversary of one of the worst
economic policies our country ever made: the Smoot-Hawley tariffs.
Don't just take my word for it. The Senate Historical Office has
characterized it as ``among the most catastrophic acts in congressional
history.''
So today I am introducing a resolution that commemorates this
anniversary as a moment to reflect on the devastating impact and the
consequences. It shows you what we can learn from history, and at its
peak, the Smoot-Hawley Tariff Act placed an average rate of 20 percent
tariffs on goods imported into the United States--just 20 percent. So
we have had this big discussion about many other things, definitely
well above 20 percent.
The goal then was to bolster U.S. farmers and manufacturers by
protecting them from foreign competition. But that goal, as we all
know, if you study history, was not met. What it did instead was widen
and deepen the Great Depression.
My resolution recounts our major trading partners, including Canada
and countries in Europe, responded to those tariffs placed on by the
United States by raising tariffs on the United States' exported goods.
So yes, let's say a trade war. And anti-United States sentiment rapidly
intensified in foreign countries, leading to a consumer boycott of
American products in Canada, France, Spain, Italy, and many other
countries.
The retaliatory tariffs and consumer boycotts caused farm and
manufacturing exports from the United States to plunge from 68 percent,
basically $5.24 billion, in 1929, to basically $1.6 billion--so from $5
billion to basically $1 billion in 1933, so a big drop in what the
United States was able to do.
The U.S. gross domestic product fell nearly in half, from $104
billion in 1929 to just $57 billion in 1932. And the unemployment rate
rose from 3.2 percent to a peak of around 23 percent in 1932. So the
Great Depression had arrived.
In my State, the State of Washington, we have always been dependent
on trade. Back then, lumber was our main export, and the trade war
essentially destroyed that industry. Production dropped 70 percent, and
the board feet dropped down to just 2 billion board feet in 1932--more
than cutting in half what we had done before. More than half of our
State's loggers lost their jobs. The unemployment rate in my State was
33 percent much higher than the national average. And where do we stand
95 years later? Do we want to take a moment and understand the lessons
of Smoot-Hawley?
The administration is running a very high tariff playbook. The
world's economy is much more interconnected now than it was in the
1930s. Uncertainty is the enemy of continued economic growth. And at
least the Smoot-Hawley tariffs were set at an established rate.
American businesses knew what they were standing up against and could
make forecasts and plans accordingly.
These tariffs in the Trump administration change at the discretion of
the President, creating huge uncertainty. Small business owners in my
State tell me that while the tariffs are a challenge, the uncertainty
is what keeps them up at night. The administration's tariffs are on par
with Smoot-Hawley era tariffs. On that, the economic historians agree:
That was a prolonged and deepened global depression. Last week, the
President said the tariffs on China would be set at 55 percent.
So what have we learned from this historical date? Before President
Hoover signed the Smoot-Hawley Act, he got a signed letter from more
than 1,000 economists--1,000 economists sent a letter. The economists
warned that raising tariffs would cause the cost to rise on consumers;
farmers and manufacturers would suffer; and retaliatory tariffs would
make exports dry up. And they said that starting a trade war would
damage our foreign relations.
As early as 1934, Congress tried to right the ship. That year, we
passed the Reciprocal Tariff Act directing Presidents to reduce us and
world tariff rates. This year, my colleague Senator Grassley and I are
trying to stop the administration by introducing the Trade Review Act
of 2025 that establishes limits on the President's ability to impose
tariffs. Why? Because this is the constitutional power given to
Congress, not to the President. The courts have already said at certain
levels that this President, as it relates to the International
Emergency Economic Powers Act, does not have this authority.
So out of the ashes of World War Two, the U.S. led in a way of
creating an open and rules-based international trading system. Tariffs
were lowered in the U.S. and abroad--falling in the U.S.--from a trade
weighted average of 20 percent in '33 to 7 percent in 1950 and
continuing to fall afterward with trade agreements.
So it means we established rules. That is what trade needs. We don't
need a President whose authority isn't in this particular area to start
trade wars with no end in sight. The rules-based trading system
provided the stability we needed to drive investment and to drive
growth.
So the resolution I am introducing today asked the Senate to affirm
the importance of a rules-based trade policy that reduces production
costs for American farmers, for manufacturers, and one that opens
markets to US exports.
It is time for us to commit to encouraging trade policies,
particularly when so many other countries are getting their products on
the shelves in foreign markets, leaving our products at home.
Let's avoid the repetition of this historical policy mistake and
instead do something that reaffirms this institution's oversight of
this issue and recognize the problems that tariffs are causing.

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