Word: smooting
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...Known as Smoot-Hawley after its legislative sponsors, the bill promptly fulfilled the worst fears of critics. A new panic seized the already battered stock market; the slide continued for two years. In raising import duties on scores of items, in some cases to 50%, the measure provoked angry retaliation by 25 of the nation's trading partners. U.S. exports fell by nearly two-thirds in just two years...
Willis Hawley of Oregon chaired the House Ways and Means Committee, and Reed Smoot of Utah headed the Senate Finance Committee. Both were fiscal experts with more than 20 years of service on Capitol Hill. But, responding to pressure from organized labor and some sectors of industry, they transformed what was to be an agricultural measure into a comprehensive increase in tariffs...
...with international trade in collapse, Franklin Roosevelt denounced Smoot-Hawley as ruinous. Hoover responded that Roosevelt would have Americans compete with "peasant and sweated labor" abroad. Then, as now, protectionism had a strong if superficial political appeal: by election eve, F.D.R. had backed down, assuring voters that he understood the need for tariffs. Protectionist politicking, however, could not save the Republicans in 1932. Smoot and Hawley joined Hoover in defeat. The Democrats dismantled the G.O.P.'s legislative handiwork with caution, using reciprocal trade agreements rather than across-the-board tariff reductions. The Smoot-Hawley approach was discredited. Sam Rayburn, House...
Though some legislators today might be reluctant to make such a promise, no one in Congress is seriously proposing anything as drastic as Smoot-Hawley. Still, the pro-tariff mania that swept Washington 55 years ago remains a danger. "What we are afraid of," says S. Bruce Smart, Under Secretary of Commerce for International Trade, "is that people are so emotional that they will do something that they know is foolish, just to do something...
...veto it, repeating dire warnings that U.S. protectionism could once again provoke foreign retaliation against what remains of American exports (which is plenty: the U.S. is still the world's biggest exporter by 27% over runner-up West Germany). Such retaliation is what happened after Congress passed the disastrous Smoot-Hawley tariff act in 1930 (see box). Just enough Senators and Representatives will change their minds on a revote to sustain the veto. Then will follow a confused struggle between legislators fearful of a trade war yet determined to force Reagan to do more to promote exports and curtail imports...