From the Super Mario Wiki
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The Smokescreen is an item found in Mario Kart Arcade GP, Mario Kart Arcade GP 2, and Mario Kart Arcade GP DX. If the player uses it, the player will throw this item backwards as the item starts to make smoke around the lane of the course. If a player gets in the smoke that came from the item, the player temporary gets blind. It works similarly to the Blooper in other Mario Kart games.