THE ROARING TWENTIES

Economic Protectionism and it’s Consequences

Economic Protectionism and it’s Consequences

ProtectionismThe US didn’t just want to isolate itself from the rest of the world in the diplomatic arena. In some ways, it also tried to isolate its economy, by trying to discourage foreign imports competing with US goods and produce. After the 1920 Depression, many business people (especially ones involved in farming) didn’t like the possibility of having to sell their goods for cheaper because of competition from lower-priced imports from abroad so supported protectionism.

Protectionist Tariffs

The Republicans sympathized with their point of view, and introduced protectionist tariffs, which placed an extra price on imported products to make them less competitive. The most important move made in this direction was the Fordney-McCumber Tariff of 1922 (named after two politicians called Joseph Fortney and Porter McCumber – make sure you don’t accidentally write ‘McCucumber’ in the exam, as some students have been known to do!). This placed pretty hefty tariffs on goods entering the US from abroad. This helped to protect American factories and farms. For the rest of the world it wasn’t great, as it made it much more difficult for them to trade with the States, but the American business community liked it a lot.