chapter7 - Chapter 7 U.S. Commercial Policy History of U.S....

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Chapter 7 U.S. Commercial Policy History of U.S. Commercial Policy GATT and the WTO Dumping Policy response to dumping Anti-dumping duties Countervailing duties Safeguard tariffs The U.S. Constitution grants Congress the right to regulate commerce with foreign nations, including the right to impose import tariffs. The last general tariff bill passed by Congress was the Smooth-Hawley Tariff (1930), under which U.S. average tariffs were raised to 53 percent on protected imports. The Smooth-Hawley Act was a classic example of logrolling or the trading of votes by legislators to secure approval on issues of interest to each one. This legislation provoked retaliation by United States trading partners. Within two years after the Smoot-Hawley Act, U.S. exports decreased by nearly two-thirds. (see the next slide) Following Hoover’s defeat in the presidential election of 1932, the Democrats dismantled the Smoot-Hawley legislation. In 1934, Congress passed the Reciprocal Trade Agreements Act , which set the stage for a wave of trade liberalization. Specifically aimed at tariff reduction, the act contained two features: (1) negotiating authority : Congress gave the president the authority to negotiate mutual tariff reductions with trading partners. (2) generalized tariff reductions through the most-favored-nation (MFN) clause. This clause is an agreement between two nations to apply tariffs to each other at rates as low as those applied to any other nation. In 1998, the term
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chapter7 - Chapter 7 U.S. Commercial Policy History of U.S....

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