A Level History - America - Practice Exam

During the 1920s, which sector faced significant struggles due to high tariffs in Europe?

1. Textile industry

2. Agricultural sector

3. Mining industry

4. Automobile industry

The correct answer is: Agricultural sector

The agricultural sector faced significant struggles during the 1920s primarily due to high tariffs in Europe. After World War I, European nations imposed tariffs to protect their own recovering economies and agricultural production. These tariffs made it difficult for American farmers to export their surplus crops abroad, leading to decreased demand for American agricultural products. Additionally, the post-war agricultural boom experienced during the war years led to overproduction; when European markets closed off due to high tariffs, American farmers found themselves with surpluses and falling prices, which drastically affected their income. Many farmers had taken on debt to expand their operations during the war when prices were high, and as prices plummeted due to the inability to sell abroad, many faced severe financial hardship and bankruptcy. In contrast, sectors such as textiles, mining, and automobiles did not experience the same level of vulnerability to European tariffs. Textile industries, for instance, were largely focused on domestic production and consumption, while the automotive industry benefited from growing domestic demand and innovation during the 1920s. Therefore, the agriculture sector is distinctly highlighted as the one facing considerable challenges due to international trade policies during that era.