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dc.titleThe Price of Protection: Tariff Incidence and Import Collapse under the Infamous Smoot-Hawley Tariff
dc.contributor.authorMitchener, Kris James
dc.contributor.authorPedemonte, Mathieu
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageUnited States
dc.date.available2026-06-22T00:06:00
dc.date.issue2026-06-22T00:06:00
dc.description.abstractUsing newly digitized monthly data on the quantities and prices of imports as well as product-level data on tariff rates, we estimate that in the first year after the passage of the Smoot-Hawley Tariff Act, imports facing rate increases fell swiftly and dramatically relative to imports not affected by tariffs: for a one-percentage-point increase in the tariff rate, they declined by an average of 4%. We also estimate that the incidence of Smoot-Hawley was almost entirely borne by U.S. importers. Using an open-economy model, we attribute our high measured short-run trade elasticity of greater than 4 to fixed exchange rates that the U.S. maintained with most trade partners in the first 15 months after enactment. Our model also suggests that Smoot-Hawley accounted for 27% of the decline in total US imports in the first year after enactment. Finally, we construct both partial equilibrium and general equilibrium welfare estimates of Smoot-Hawley. Both methods deliver welfare losses of about 0.2% of GDP, reflecting the high measured elasticity of substitution and low US import-GDP ratio.
dc.format.extent95
dc.identifier.doihttp://dx.doi.org/10.18235/0014083
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/The-Price-of-Protection-Tariff-Incidence-and-Import-Collapse-under-the-Infamous-Smoot-Hawley-Tariff.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectTrade Policy
dc.subjectTariff System
dc.subjectRating
dc.subjectIntegration and Trade
dc.subjectImport
dc.subjectGross Domestic Product
dc.subjectExchange Rate
dc.subjectForest Resource
dc.subjectInternational Trade Policy
dc.subject.jelcodeF10 - Trade: General
dc.subject.jelcodeF13 - Trade Policy • International Trade Organizations
dc.subject.jelcodeF14 - Empirical Studies of Trade
dc.subject.jelcodeF63 - Economic Development
dc.subject.jelcodeF68 - Policy
dc.subject.jelcodeN12 - U.S. • Canada: 1913—
dc.subject.jelcodeN72 - U.S. • Canada: 1913—
dc.subject.keywordstrade policy;Pass through;Smoot-Hawley Tariff;trade elasticity;International trade;tariff incidence;welfare analysis of tariffs
dc.typeWorking Papers
idb.identifier.pubnumberIDB-WP-01821
idb.operationRG-K1098
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