Over the last century, the United States has transformed from a high tariff protectionist national economy into a low tariff free market international economy. Various political institutions, industries and other factors helped shape both the formation and outcome of three major tariff and trade policies that have helped shape the world economy. Historical events such as WWI and WWII also had major impacts on the world economy and that is reflected in how the US handled its trade policy. Through close examination it becomes clear that the US has become an economic hegemon through the liberalization of its trade policy which was and continues to be shaped by national and international politics. The first world war had a major effect on world trade and how governments responded to the economic fall out of the war. Leading up to and during the war many governments chose to insulate themselves by increasing tariffs to reduce all imports …show more content…
Whereas in 1930 protectionist Republican controlled the white house and senate in 1934 the democrats had taken over and were much more proponents of free trade. In 1934 the Reciprocal Tariff Act was passed. This act radically changed how the United States dealt with tariffs and would hopefully reopen the United States to freer trade. First off it shifted away from unilateral reductions and instead relied on reciprocity. The president was authorized to conduct negotiations to reduce tariffs in exchange for equivalent reductions and concessions which would open up foreign markets to US exports. As discussed in Oatley’s book International Political Economy this divided up larger interest groups into smaller more focused industry interest groups that could more easily pursue their goals. (This reduced protectionist pressure on politicians which encourage further trade liberalization. Secondly