3. Smoot-Hawley triggers U.S. - Canada trade war
Things got even worse during the Great Depression. In 1930, Congress wanted to protect U.S. jobs from global trade. So the U.S. slapped tariffs on all countries that shipped goods to America in an effort to shield workers.
It was called the Smoot-Hawley Act. Today, it is widely accepted that this law made the Great Depression worse than it was.
Canada was furious, and retaliated more than any other country against the U.S., sparking a trade war.
"Canada was so incensed that...they raised their own tariff on certain products to match the new U.S. tariff," according to Doug Irwin, a Dartmouth Professor and author of "Peddling Protectionism: Smoot-Hawley and the Great Depression."
For example, the U.S. increased a tariff on eggs from 8 cents to 10 cents (these are 1930s prices, after all). Canada retaliated by also increasing its tariff from 3 cents to 10 cents -- a threefold increase.
Exports dwindled sharply: in 1929, the U.S. exported nearly 920,000 eggs to Canada. Three years later, it only shipped about 14,000 eggs, according to Irwin.