Everywhere, as foreign markets dried up and production and employment levels began to fall, nations struggled to preserve the home market. Tariffs were raised and import quotas introduced to prevent the importation of foreign goods. Sometimes this was done to create favorable bargaining positions for negotiation of tariff reductions with other states, but actual reductions were rare. By 1931 the tariff rates of some fifteen European nations had increased 64 per cent over the 1927 level. These measures acted to reduce international trade further—during the 1930’s trade in manufactured products between Germany, Britain, and France fell to half the 1913 level—and to create greater disparities between domestic and world prices. The clearest indication of the pervasive pressures toward protection was the adoption of general import duties by Great Britain, the bastion of free trade. This historic step was announced on February 4, 1932, by Neville Chamberlain, the Chancellor of the Exchequer, in a speech to the House of Commons in which he surveyed the effects of the Depression on Britain’s economy.
KeywordsForeign Market Tariff Rate Tariff Reduction World Prex Short Interest
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