Question

In 1933, U.S. manufacturers, which used to enjoy steady relationships with their foreign distributors and export nearly 30% of their output, realized that their exports had fallen to only 10% of total output. Which of the following is the most likely reason for this decrease in exports?

a. The low quality of U.S. products
b. Retaliatory tariffs by trading partners
c. War between the United States and Mexico

Answer 1

Answer: b. Retaliatory tariffs by trading partners

Step-by-step explanation:

In the 20s, the United States instituted a series of tariffs on imports that culminated with the Smoot-Hawley tariff of 1930 as they hoped to protect the local industry and to increase government revenue.

Some countries replied with their own tariffs on American exports such that American exports to these countries fell significantly and world trade reached a new low as well.