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How did protectionist trade policies affect producers of raw materials in Africa, Asia, and Latin America?

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A long line of unemployed men in coats and hats stands outside a soup kitchen in Chicago, with a storefront sign reading Free Soup, Coffee and Doughnuts for the Unemployed. — Great Depression Unemployed men standing in line outside a soup kitchen, Chicago.

During the Great Depression, the global rise of protectionist trade policies—exemplified by the 1930 Smoot-Hawley Tariff Act—had a devastating impact on producers of raw materials in Africa, Asia, and Latin America.1

These protectionist measures contributed to an extreme decline in the world prices of primary commodities, such as coffee, cotton, silk, and rubber, which saw their values drop by roughly half between late 1929 and late 1930. This collapse in commodity prices caused severe balance-of-payments problems for countries that relied on the export of these raw materials. Consequently, these nations were forced to adopt contractionary monetary and fiscal policies to manage the resulting economic instability. The precipitous decline in the terms of trade further exacerbated the economic hardship faced by these primary-commodity-producing regions during this period.12