Just over 120 years ago, Winston Churchill gave a speech in Manchester, railing against protectionist trade policy. He was only four years into his political career in 1904 but he summed up the topic of tariffs with what was, even then, Churchillian drollness: "To think you can make a man richer by putting on a tax is like a man thinking that he can stand in a bucket and lift himself up by the handle."
Churchill's now-famous Manchester Free Trade Speech heralded a temporary split with his Conservative Party and was indicative of his unfiltered, no-holds-barred political style that made for great quotes, breathtaking emotional highs, and lows that led to periods of complete obscurity over his 55-year political career.
Around the same time as the Manchester Free Trade Speech, Americans were having the same debate across the pond. President Teddy Roosevelt refused to take active part in tariff debates and focused on trustbusting – breaking up large corporate conglomerates to allow for greater competition. His stonewalling on the tariff issue allowed for the easing of the McKinley-era tariffs once he left office in 1909.
Tariffs came back stronger with election of the short-lived Warren Harding in 1920 and after Calvin Coolidge assumed the Presidency after Harding's sudden death just 2 ½ years into his term. Coolidge also signed into law the Immigration Act of 1924, which banned immigrants from Asia, and capped immigrants from the rest of the world at 80% below the average of that before 1914.
In the post-World War I world of the 1920s, the U.S. and European powers struggled to recover from the human, financial and physical losses caused by the war. In 1927, participants in the League of Nations agreed that free trade was the answer to help reset economies, but nearly every country instead did the opposite. Gross domestic product on a global scale was starting to slip by the end of the decade.
Senator Reed Smoot of Utah and Representative Willis Hawley of Oregon, both Republicans, acting to protect American farmers, put together bills for their respective chambers in 1929. Republicans controlled both the House and the Senate after the 1928 election. The House version passed in May. The Wall Street Crash of 1929 took place in October, signaling the zero hour of the Great Depression.
The Senate debated its version until March of 1930. Ultimately, the higher tariffs in the House version prevailed and the Smoot-Hawley Act went to Republican President Herbert Hoover, elected in 1928, for signature.
Hoover did not want to sign it, calling it "vicious, extortionate and obnoxious." More than a thousand economists signed onto a letter asking him not to sign it. Automobile tycoon Henry Ford begged him not sign it. J.P. Morgan's chief executive begged him not to sign it. Simultaneously, Hoover's Cabinet threatened to resign if he did not sign it, and he feared retaliation from Congress. He signed it on June 17, 1930.
Retaliation began as soon as the House passed its version of the bill, with boycotts. By September 1929, the Hoover administration had received protest notes from 23 trading partner nations. Let's remember this is before television, much less the internet. Canada imposed new tariffs in May, 1930, a month before it became law. France and Britain found new trading partners and Germany developed a new trade system altogether.
After the Smoot-Hawley Act was signed into law, Cuba, Mexico, France, Italy, Spain, Argentina, Australia, New Zealand, and Switzerland all imposed retaliatory tariffs.
U.S. imports decreased 66% from $4.4 billion (1929) to $1.5 billion (1933), and exports decreased 61% from $5.4 billion to $2.1 billion. GNP fell from $103.1 billion in 1929 to $75.8 billion in 1931 and bottomed out at $55.6 billion in 1933.
Unemployment was 8% in 1929 and did not improve because of the tariffs. The rate doubled by 1931 to 16% and reached 25% by 1932.
Smoot, Hawley, and Hoover were all voted out of office in 1932 (a total of 12 Republican Senators would lose their seats, and 97 House seats would flip to the Democrats). Churchill and voters understand how buckets and taxes work.
Merritt Hamilton Allen is a PR executive and former Navy officer. She appeared regularly as a panelist on NM PBS and is a frequent guest on News Radio KKOB. A Republican for 36 years, she became an independent upon reading the 2024 Republican platform. She lives amicably with her Democratic husband north of I-40 where they run one head of dog, and one of cat. She can be reached at
