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At first glance, the logic seems captivating: the easiest way to protect one's own economy from annoying competition from abroad is to make the import of products more expensive.
So raise new tariffs or increase existing ones.
It was precisely this policy that the Republican Party pursued in the United States.
Since the elections in November 1918 she had a majority in both chambers of the US Congress, and since March 1921 she has also appointed Warren G. Harding as President.
Protectionism, i.e. protective tariffs against imports, was one of the party's election promises.
US President Warren Harding (2nd from left) and his predecessor Woodrow Wilson (left) on their way to the Capitol in 1921
Source: picture alliance / Heritage Imag
In September 1922, Harding signed the Fordney-McCumber Customs Act into force.
Named after the Republican financial experts in the House and Senate, this bill increased tariffs on imports into the United States.
The two namesake had come up with a complicated system of commissions to set “fair” tariffs.
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As a result, however, the farmers and industrial workers whom protectionist US politicians had tried to help with the import fees had the damage.
And for several reasons.
Republican politicians Joseph W. Fordney (left) and Porter J. McCumber gave the Customs Act their name
Source: Wikimedia Commons / Public Domain
First, the countries that had to repay the US loans from the First World War could no longer meet many obligations because they were largely excluded from the US market.
This put the American banks under pressure, which in turn increased the cost of capital in their own country.
Second, the import duties increased the price level in the USA.
Because even the largest industrial power in the world was by no means economically self-sufficient, but remained dependent on imports of certain goods.
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Thirdly, European countries reacted with strong tariff increases on certain US goods.
France, for example, increased the import tariffs on US automobiles from 45 to 100 percent, Spain imposed a flat tariff of 40 percent on all products from the United States.
Millions of Americans lost their jobs in the Great Depression from 1929 to 1936
Source: Getty Images
Even Germany, the loser of the war, and Italy, a victorious power that was just as badly damaged, made the import of American wheat more expensive.
The result: The US economy weakened - which was not so noticeable at first because of the simultaneous, but purely credit-driven boom on the stock market.
In order to counteract the slump in exports as a result of the customs policy, the US government promoted the granting of cheap, short-term loans abroad, especially again to Germany and Austria, in order to create markets for the sale of own products.
But many of these loans failed from 1929. It was the fourth negative effect of the ill-considered high tariff policy.
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There had been enough warning voices.
The Democratic MP Cordell Hull, later US Secretary of State under President Franklin D. Roosevelt, had described the consequences of the Fordney-McCumber Act: “Our strength in the foreign markets depends on the efficiency of our production and on the import duties of the countries.
Our own tariffs are an important factor in both.
They degrade efficiency and lead to higher import duties for US goods. "
The profiteers of President Herbert Hoovers (r.) Politics (caricature around 1930)
Source: picture-alliance / dpa
Even the auto magnate Henry Ford warned early on against a protectionist policy.
Although the US was a leader in technology, protectionism threatened the sales opportunities of its own industry.
When the negative consequences of the Fordney-McCumber tariffs got out of hand, the still Republican-dominated Congress did not decide to revise the law - on the contrary: it was tightened.
In May 1929, Senator Reed Smooth and Rep. Willis C. Hawley passed a second customs law named after them.
It should raise US tariffs to record levels on over 20,000 products.
It took almost 13 months for the law to come into effect, as practically all economic expertise in the US rejected the law.
When the new President Herbert Hoover, also a Republican, put the new tariffs into effect on June 17, 1930, the global economic crisis was raging, among other things triggered by the bursting of the credit bubble on the US stock market in November 1929.
Unemployed people stand in front of a homeless shelter in New York in 1930
Source: picture-alliance / dpa
Hoover, who had originally advocated an increase in tariffs primarily to protect US agriculture and industrial workers, had changed his position and called the Smooth Hawley Act in the spring of 1930 "malicious, extortionate and disgusting".
But he had to bow to the decision of Congress.
The Republicans' foreclosure policy accelerated the decline of the US economy enormously: Their exports shrank by three fifths, from 5.4 to 2.1 billion dollars.
Imports fell even more sharply, from 1929 to 1933 by two thirds, from 4.4 to 1.5 billion dollars.
But contrary to what was assumed by the non-economists in Congress, it did not balance each other out.
In the 1932 presidential election campaign, the consequences of the high tariff policy were clearly visible: Agriculture and export-oriented US industry in particular were down.
With a clear anti-customs policy, the Democratic candidate Roosevelt won, and both Reed Smooth and Willis C. Hawley missed re-election: At the time, Americans understood that protectionism was extremely short-sighted.
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This article was first published in 2018.