Protectionism

1. Protectionism By Chelsea DeGuia, Jessica Bender, Viviana Orozco, & Caleb Menendez

2. What Was Protectionism? • Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition. Typical methods of protectionism are import tariffs, quotas, subsidies or tax cuts to local businesses and direct state intervention.

3. Opinion • “Protectionism, as practiced even by traditionally free trade Great Britain and by the many new nations in Eastern Europe, simply reduced market opportunities and made a bad situation worse.” • From World Civilizations: The Global Experience 3rd Edition

4. Timeline • 1927- World Conference at Geneva • Realized world was reliant on trade • 1930- U.S. passed the Hawley-Smoot Tariff act which limited imported goods to America • Over 30 countries protested • 60 filed suit • 1930- Beggar-thy-neighbor policy • Designed to improve ones own lot at the expense of others • Lose-lose situation • 1932- U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932 • 1932- U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932 • 1933- Global Depression at its worst • 1929 -1934 -World trade declined by 66%

5. Key Reasons • Unemployment increased in U.S. • Europe found it difficult to pay off reparations & war debts • Proved far worse for less developed countries that depended heavily on the export of raw materials & cash crops for revenues • Malaysia experienced an 80% drop in export revenues between 1929 & 1932 • Efforts to protect domestic industries had a disastrous impact on the world economy & greatly contributed to the length & depth of the Great Depression

6. Trade vs. Production