Retaliation to this event – the passing of the Smoot-Hawley protectionist trade bill through both American legislative houses , the House of Representatives & the US Senate itself , was not long in coming. Warnings had been ignored – economic , trade and foreign currency effects of this protectionist trade policy , and the predicted but ignored results were not long in coming.
The purpose of the act itself may have been noble , to protect jobs and the US dollar at ” home” yet the effects in the end were catastrophic and took years and years of economic activity and indeed the great war of World War II to undo the economic damages and the effects on foreign currencies and foreign currency trading. As an example and economic market in the year following the American stock market crash , the U.S. unemployment rate was 7.8 % while 3 years later it had escalated to a a full 25 %.
One of the first counties to retaliate in what might be considered a protectionist trade war was Canada which imposed tariffs and surcharges on 125 major products – which were major exports of the US and indeed Canada served as a major import market – as well as a means of foreign trade with its inherent effects on the values and inherent desirability of holding and trading these two major currencies.
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Tags: American Stock Market, Economic Activity, Economic Damages, Economic Market, Economic Trade, Foreign Currencies, Foreign Currency Trading, Great War, Import Market, Legislative Houses, Major Exports, Protectionist Trade Policies, Protectionist Trade Policy, Smoot Hawley, Stock Market Crash, Surcharges, Trade War, Unemployment Rate, Us Senate, World War Ii