13. The Reciprocal Tariff Agreements Act of 1934
During his first campaign for President in 1932 Franklin Roosevelt argued against the Smoot-Hawley tariffs, with the support of most of the nation’s leading economists. Prior to 1934, Congress had the authority to impose tariffs, and did so based on the tariffs established by a trading partner. Congress established and changed tariffs unilaterally, and between 1870 and 1930 often established protectionist tariffs. Typically Republican run Congresses established tariffs higher than those of the trading partner while Democratic Congresses usually lowered them to increase trade. In 1933 Roosevelt tasked Cordell Hull with drafting the Reciprocal Tariff Agreements Act, which he then shepherded through Congress and signed in June 1934, altering the means under which tariffs were established by the United States.
The Reciprocal Tariff Agreements Act of 1934 (RTAA) established that reductions of the tariffs levied by the United States were linked to reciprocal reductions by its trading partners. It also established that the President had the authority to negotiate trade agreements and the terms of the tariffs, and allowed the Senate to confirm the agreement through a simple majority vote, unlike most treaties, which required a two-thirds majority vote for confirmation. It was an action in which Roosevelt convinced the Congress to cede a part of its Constitutional authority to the executive branch. Roosevelt immediately began lowering American tariffs, negotiating similar actions with trading partners, and world-wide trade expanded dramatically once the restraining Smoot-Hawley tariffs were dispensed with. Trade cooperation between nations replaced trade competition as a winner take all philosophy.