The Nixon shock after forty years: the import surcharge revisited

Abstract

AbstractOn 15 August 1971, President Richard Nixon closed the gold window and imposed a 10% surcharge on all dutiable imports in an effort to force other countries to revalue their currencies against the dollar. The import surcharge was lifted four months later after the Smithsonian agreement led to new exchange rate parities. This paper examines the political, economic, and legal issues surrounding this use of trade sanctions to achieve exchange rate adjustments.