Final answer:
The Great Depression dramatically affected global trade due to U.S. banks recalling international loans, escalating unemployment, and retaliatory tariffs resulting from the Hawley-Smoot Tariff Act, with the GDP dropping significantly worldwide.
Step-by-step explanation:
The Great Depression in the United States had a profound impact on global trade, leading to a significant decrease in the worldwide gross domestic product (GDP). One of the reasons was the U.S. stock market crash in 1929 which led to American banks recalling loans from foreign businesses and countries, causing international financial crises.
Furthermore, U.S. unemployment rates skyrocketed, and domestic overproduction coupled with underconsumption further exacerbated the economic slump.
Congress attempted to aid the situation by passing the Hawley-Smoot Tariff Act in 1930; however, it backfired by intensifying unemployment and leading to retaliatory tariffs from other nations, which in turn decreased world trade by over forty percent.
The global impact was extensive, with no part of the world, including China and Japan, left unaffected. In parallel, European countries faced their challenges and employed different strategies such as lowering tariffs or implementing austerity programs to combat the depression.