It has been suggested that Tariff in American history be merged into this article or section. (Discuss)

For general information on tariffs, see Tariff.

There are two sides to history of tariffs in the Economic history of the United States. In the first place, it was the single most important source of federal revenue from the 1790s to the eve of World War I, when it was finally surpassed by income taxes. So essential was this revenue source, and so easy was it to collect at the major ports, that all sides agreed that the nation should have a tariff for revenue purposes. In practice, that was an average tax of about 20% of the value of some imported goods. (Imports that were not taxed were "free".) Image File history File links Please see the file description page for further information. ... A tariff is a tax on imported goods. ... A tariff is a tax on imported goods. ... The economic history of the United States has its roots in the quest of European settlers for economic gain in the 16th, 17th, and 18th centuries. ...

The second issue was the political dimension of the tariff. From the 1790s to the 2000s, the tariff (and closely related issues such as import quotas and trade treaties) have generated enormous political stresses. At one point South Carolina threatened to leave the Union on the tariff issue.

1789 to 1828

The Tariff Act of 1789 imposed the first national source of revenue for the newly formed United States. The new Constitution allowed only the federal government to levy tariffs, so the old system of state rates disappeared. The new law taxed all imports at rates from 5 to 15 percent. These modest rates were primarily designed to generate revenue to pay the national debt and annual expenses of the federal government. In his Report on Manufactures Treasury Secretary Alexander Hamilton proposed a far-reaching scheme to use protective tariffs as a lever for rapid industrialization. Some of Hamilton's recommendations resulted in upward tariff revisions in 1790 and 1792, though the high protectionism he called for was not adopted until after the War of 1812. Likewise owners of the small new factories that were springing up in the northeast to produce boots, hats, candles, nails and other common items failed to obtain higher tariffs that would significantly protect them from more efficient British producers. A 10% discount on the tax was offered on items imported in American ships, so that the American merchant marine would be supported. The Hamilton Tariff of 1789 was one of the first bills established by the new United States government. ... A portrait of Alexander Hamilton by John Trumbull, 1792. ... Alexander Hamilton (January 11, 1755 or 1757 – July 12, 1804) was an American politician, statesman, writer, lawyer, and soldier. ...

After the War of 1812, tariffs were raised sharply. Hatred of England was one reason; the primary goal was protection for the manufacturing industries that now were growing rapidly in the Northeast. Every Congressman was eager to logroll a higher rate for his local industry. Senator Daniel Webster, formerly a spokesperson for Boston's merchants who imported goods (and wanted low tariffs), switched dramatically to represent the manufacturing interests in the Tariff of 1824. Rates were especially high for bolts of cloth and for bar iron, of which Britain was a low-cost producer. The culmination came in the Tariff of 1828, ridiculed by free traders as the "Tariff of Abominations", with duties averaging over 50 percent. Intense political reaction came from South Carolinians, who concluded that they would pay more for imports and sell less cotton abroad, so their economic interest was being unfairly injured. They attempted to "nullify" the federal tariff and spoke of secession (see the Nullification Crisis). The compromise that ended the crisis included a lowering of the tariff over ten years to a uniform 20% in 1842. Daniel Webster (1782–1852) Daniel Webster (January 18, 1782 – October 25, 1852) was a United States Senator and Secretary of State. ... The Tariff of 1824, also known as the Sectional Tariff of 1824, was a protective tariff in the United States designed to foster Americas burgeoning industry in the face of cheaper British commodities, especially iron products, wool and cotton textiles, and agricultural goods. ... The Tariff of 1828, also known as the Tariff of Abominations, was a protective tariff passed by the U.S. Congress in 1828. ... The Nullification Crisis was a sectional crisis during the presidency of Andrew Jackson centered around the question of whether a state can refuse to recognize or to enforce a federal law passed by the United States Congress. ...

Tariff 1828-60

Henry Clay and his Whig Party, envisioning a rapid modernization based on highly productive factories, sought a high tariff. Their key argument was that startup factories, or "infant industries," would at first be less efficient than European (British) producers. Furthermore, American factory workers would be paid higher wages than their European competitors. The arguments proved highly persuasive in industrial districts. Clay's position was adopted in the 1828 and 1832 Tariff Acts. Henry Clay Henry Clay (April 12, 1777 in Hanover County, Virginia, USA – June 29, 1852 in Washington, D.C.) was a leading American statesman and orator who served in both the House of Representatives and Senate. ... The Whig Party was a political party of the United States during the era of Jacksonian democracy. ...

The Nullification Crisis forced an abandonment of the Whig position of higher tariffs over ten years until 1842. When the Whigs won victories in the 1840 and 1842 elections, taking control of Congress, they reinstituted higher tariffs with the Tariff of 1842. The Tariff of 1842, or Black Tariff as it became known, was a protectionist tariff schedule adopted in the United States to reverse the effects of the Compromise Tariff of 1833. ...

The Democrats won in 1844, electing James K. Polk as president. Polk succeeded in passing the Walker tariff of 1846 by uniting the rural and agricultural factions of the country for lower taxes. They sought minimal levels of a "tariff for revenue only" that would pay the cost of government but not show favoritism to one section or economic sector at the expense of another. The Walker Tariff remained in place until 1857, when the Democratic Congress lowered them again with the Tariff of 1857 to 18 percent. James Knox Polk (November 2, 1795 – June 15, 1849) was the eleventh President of the United States, serving from March 4, 1845 to March 3, 1849. ... The 1846 Walker tariff was a United States Democratic Party-passed bill that reversed the high rates of tariffs imposed by the Whig-backed Black Tariff of 1842 under president John Tyler. ... The Tariff of 1857 was a major tax reduction in the United States, creating a mid-century lowpoint for tariffs. ...

Civil War Protective Policy, 1861-1913

The Panic of 1857 was blamed by many former Whigs and industrialists on the free trade policy of the 1857 law. Legislators such as Justin Morrill and economist Henry Carey began to push for a restoration of the Whig American System program of protective tariffs. The first of these was passed in early 1861 and bears the name of the Morrill Tariff. The Panic of 1857 was a notable sudden collapse in the economy of the United States that occurred in 1857. ... Justin Smith Morrill (April 14, 1810 – December 28, 1898) was a Representative (1855–1867) and a Senator (1867–1898) from Vermont. ... Henry Carey is the name of either Henry Charles Carey (1793-1879) - an American economist Henry Carey (died 1743) - dramatist and song-writer This is a disambiguation page — a navigational aid which lists other pages that might otherwise share the same title. ... The American System can mean one of the following: American system of manufacturing American System (economics) This is a disambiguation page — a navigational aid which lists other pages that might otherwise share the same title. ... The Morrill Tariff of 1861 was a protectionist tariff bill passed by the U.S. Congress in early 1861. ...

During the American Civil War Washington needed vast revenues. The Morrill Tariff was revised upward twice more between 1861 and 1862. Desperate for money, the new Confederate States of America adopted the U.S.'s 1857 tariff rates on all trade with the United States—replacing intra-state trade that existed before their separation with the north. With the low-tariff southerners gone, the Republican-controlled Congress doubled and tripled the rates on European goods, which topped out at 49 percent in 1868. The U.S. never put a tariff on goods from the Confederacy because the U.S.A. never recognized the legal existence of the C.S.A. Throughout the Civil War the southern states were under a blockade by the northern states. Very little trade that was legal occurred between either side because most goods were considered war contraband. Combatants United States of America (Union) Confederate States of America (Confederate) Commanders Abraham Lincoln, Ulysses S. Grant Jefferson Davis, Robert E. Lee Strength 2,200,000 1,064,000 Casualties Killed in action: 110,000 Total dead: 360,000 Wounded: 275,200 Killed in action: 93,000 Total dead: 258...

After the war, high tariffs remained. Advocates insisted that tariffs brought prosperity to the nation as a whole and no one was really injured. As industrialization proceeded apace throughout the Northeast, some Democrats, especially Pennsylvanians, became high tariff advocates. The Republican high tariff advocates appealed to farmers with the theme that high-wage factory workers would pay premium prices for foodstuffs. This was the "home market" idea, and it won over most farmers in the Northeast, but it had little relevance to the southern and western farmers who exported most of their cotton, tobacco and wheat. In the late 1860s the wool manufacturers (based near Boston and Philadelphia) formed the first national lobby, and cut deals with wool-growing farmers in several states. Their challenge was that fastidious wool producers in Britain and Australia marketed a higher quality fleece than the careless Americans, and that British manufacturers had costs as low as the American mills. The result was a wool tariff that helped the farmers by a high rate on imported wool—a tariff the American manufacturers had to pay—together with a high tariff on finished woollens and worsted goods. Apart from wool and woolens, American industry and agriculture—and industrial workers—had become the most efficient in the world by the 1880s. They were not at risk from cheap imports. No other country had the industrial capacity, the high efficiency and low costs, or the complex distribution system needed to compete in the vast American market. Indeed, it was the British who watched in stunned horror as cheaper American products flooded their home islands. Wailed the London Daily Mail in 1900,

"We have lost to the American manufacturer electrical machinery, locomotives, steel rails, sugar-producing and agricultural machinery, and latterly even stationary engines, the pride and backbone of the British engineering industry."

Nevertheless American manufacturers and workers demanded the high tariff be maintained. The tariff represented a complex balance of forces. Railroads, for example, consumed vast quantities of steel. To the extent tariffs raised steel prices, they felt injured. The Republicans became masters of negotiating exceedingly complex arrangements so that inside each of their congressional districts there were more satisfied "winners" than disgruntled "losers." The tariff after 1880 was an ideological relic with no economic rationale—it was a timebomb waiting to explode—and it repeatedly did explode.

Democratic president Grover Cleveland redefined the issue in 1887, with his stunning attack on the tariff as inherently corrupt, opposed to true republicanism, and inefficient to boot: "When we consider that the theory of our institutions guarantees to every citizen the full enjoyment of all the fruits of his industry and enterprise... it is plain that the exaction of more than [minimal taxes] is indefensible extortion and a culpable betrayal of American fairness and justice." The election of 1888 was fought primarily over the tariff issue, and Cleveland lost. Republican Congressman William McKinley argued, Stephen Grover Cleveland (March 18, 1837 – June 24, 1908) was the 22nd (1885–1889) and 24th (1893–1897) President of the United States, and the only President to serve two non-consecutive terms. ... William McKinley (January 29, 1843 – September 14, 1901) was the 25th President of the United States. ...

"Free foreign trade gives our money, our manufactures, and our markets to other nations to the injury of our labor, our tradespeople, and our farmers. Protection keeps money, markets, and manufactures at home for the benefit of our own people."

Democrats campaigned energetically against the high McKinley tariff of 1890, and scored sweeping gains that year; they restored Cleveland to the White House in 1892. The severe depression that started in 1893 destroyed the Democratic party. Cleveland insisted on a much lower tariff. His problem was that Democratic electoral successes had brought in Democratic congressmen from industrial districts who were willing to raise rates to benefit their districts. The Wilson-Gorman Tariff Act of 1894 did lower overall rates from 50 percent to 42 percent, but contained so many concessions to protectionism that Cleveland refused to sign it. McKinley campaigned heavily in 1896 on the tariff as a positive solution to depression. Promising protection and prosperity to every economic sector, he won a smashing victory. The Republicans rushed through the Dingley tariff in 1897, boosting rates back to the 50 percent level. Democrats responded that the high rates created "trusts" (monopolies) and led to higher consumer prices. McKinley won reelection by an even bigger landslide and started talking about a post-tariff era of reciprocal trade agreements. Reciprocity went nowhere; McKinley's vision was a half century too early. The Revenue Act or Wilson-Gorman tariff of 1894 slightly reduced the U.S. tariff rates from the numbers set in the 1890 McKinley tariff. ... The Dingley Act of 1897, introduced by U.S. Representative Nelson Dingley, Jr. ...

The delicate balance flew apart on president William Howard Taft's watch. Taft campaigned in 1908 for tariff "reform," which everyone assumed meant lower rates. The House lowered rates with the Payne Bill, then sent it to the Senate where Nelson Wilmarth Aldrich worked his sleight of hand. Whereas Aldrich was a New England businessman and a master of the complexities of the tariff, the Midwestern Republican insurgents were rhetoricians and lawyers who distrusted the special interests and assumed the tariff was sheer robbery for the benefit of fat cats at the expense of the ordinary consumer. Rural America believed that its superior morality deserved special protection, while the dastardly immorality of the trusts—and cities generally—merited financial punishment. Aldrich baited them. Did the insurgents want lower tariffs? His wickedly clever Payne-Aldrich Tariff Act of 1909 lowered the protection on Midwestern farm products, while raising rates favorable to his Northeast. William Howard Taft (September 15, 1857 – March 8, 1930) was an American politician, the 27th President of the United States, the 10th Chief Justice of the United States, a leader of the progressive conservative wing of the Republican Party in the early twentieth century, a chaired professor at Yale Law... Nelson Wilmarth Aldrich (November 6, 1841 - April 16, 1915) was an American politician. ... The Payne-Aldrich Tariff Act of 1909, named for Representative Sereno E. Payne and Senator Nelson W. Aldrich, reduced the United States tariff rate to 37%. It was very effective. ...

Tariff with Canada

The Canadian-American Reciprocity Treaty increased trade between 1855 and its ending in 1866. When it ended Canada turned to tariffs. The National Policy was a Canadian economic program introduced by John A. Macdonald's Conservative Party in 1879 after it returned to power. It had been an official policy, however, since 1876. It was based on high tariffs to protect Canada's manufacturing industry. Macdonald campaigned on the policy in the 1878 election, and handily beat the Liberal Party, which supported free trade. Efforts to restore free trade with Canada collapsed when Canada rejected a proposed reciprocity treaty in fear of American imperialism in the Canadian federal election, 1911. Taft negotiated a reciprocity agreement with Canada, that had the effect of sharply lowering tariffs. Democrats supported the plan but Midwestern Republicans bitterly opposed it. Barnstorming the country for his agreement, Taft undiplomatically pointed to the inevitable integration of the North American economy, and suggested that Canada should come to a "parting of the ways" with Britain. Canada's Conservative Party now had an issue to regain power from the low-tariff Liberals; after a surge of pro-imperial anti-Americanism, the Conservatives won. Ottawa rejected reciprocity, reasserted the National Policy and went to London first for new financial and trade deals. The Payne Aldrich Tariff of 1909 actually changed little and had slight economic impact one way or the other, but the political impact was enormous. The insurgents felt tricked and defeated and swore vengeance against Wall Street and its minions Taft and Aldrich. The insurgency led to a fatal split down the middle in 1912 as the GOP lost its balance wheel. The Canadian American Reciprocity Treaty was a trade treaty between the colonies of British North America and the United States. ... The National Policy was a Canadian economic program introduced by John A. Macdonalds Conservative Party in 1879 after it returned to power. ... Sir John Alexander Macdonald, KCMG, GCB, QC, PC, DCL, LL.D (January 11, 1815 – June 6, 1891) was the first Prime Minister of Canada from July 1, 1867 – November 5, 1873 and October 17, 1878 – June 6, 1891. ... The Canadian parliament after the 1911 election The Canadian federal election of 1911 was held to elect members of the Canadian House of Commons. ... The National Policy was a Canadian economic program introduced by John A. Macdonalds Conservative Party in 1879 after it returned to power. ...

President Teddy Roosevelt watches GOP team pull apart on tariff issue

Image File history File links Download high resolution version (640x765, 100 KB) Summary US editorial cartoon 1901 Licensing This image is in the public domain in the United States. ... Image File history File links Download high resolution version (640x765, 100 KB) Summary US editorial cartoon 1901 Licensing This image is in the public domain in the United States. ...

Low tariff policy, 1913 to present

Woodrow Wilson made a drastic lowering of tariff rates a major priority for his presidency. The 1913 Underwood Tariff cut rates, but the coming of world war in 1914 radically revised trade patterns. Reduced trade and, especially, the new reveues generated by the federal income tax made tariffs much less important. When the Republicans regained power after the war they restored the usual high rates. The Great Depression was worldwide, and international trade shrank drastically. The crisis baffled the GOP, and it unwisely tried its magic one last time in the Smoot-Hawley Tariff Act of 1930. This time it backfired, as Britain, Germany, France and other industrial countries retaliated with their own tariffs and special, bilateral trade deals. American imports and exports both went into a tailspin. Franklin Roosevelt and the New Dealers made promises about lowering tariffs on a reciprocal country-by-country basis (which they did), hoping this would expand foreign trade (which it did not.) Frustrated, they gave much more attention to domestic remedies for the depression; by 1936 the tariff issue had faded from politics, and the revenue it raised was small. In World War II both tariffs and reciprocity were insignificant compared to trade channeled through Lend Lease. After the war the U.S. promoted the General Agreement on Tariffs and Trade (GATT) established in 1947, to minimize tariffs and other restrictions, and to liberalize trade among all capitalist countries. In 1995 GATT became the World Trade Organization WTO; with the collapse of Communism its open markets/low tariff ideology became dominant worldwide in the 1990s. 1913 (MCMXIII) was a common year starting on Wednesday. ... The Underwood Tariff, or the Tariff Act of 1913 reduced the basic United States tariff rates from 41% to 27%, well below the Payne-Aldrich Tariff Act of 1909. ... 1914 (MCMXIV) was a common year starting on Thursday. ... The examples and perspective in this article or section may not represent a worldwide view. ... The Great Depression was known as a worldwide economic downturn, starting in 1929 and lasting through most of the 1930s. ... The Hawley-Smoot or Smoot-Hawley Tariff Act raised U.S. tariffs on over 20,000 imported goods to record levels, and, in the opinion of many economists, protracted or even initiated the Great Depression. ... 1930 (MCMXXX) is a common year starting on Wednesday. ... Franklin Delano Roosevelt (January 30, 1882–April 12, 1945), often referred to as FDR, was the 32nd (1933–1945) President of the United States. ... 1936 (MCMXXXVI) was a leap year starting on Wednesday (link will take you to calendar). ... Combatants Allies: Poland, British Commonwealth, France/Free France, Soviet Union, United States, China, and others Axis Powers: Germany, Italy, Japan, and others Casualties Military dead: 17 million Civilian dead: 33 million Total dead: 50 million Military dead: 8 million Civilian dead: 4 million Total dead: 12 million World War II... For other uses, see United States (disambiguation) and US (disambiguation). ... General Agreement on Tariffs and Trade (usually abbreviated GATT) functions as the foundation of the WTO trading system, and remains in force, although the 1995 Agreement contains an updated version of it to replace the original 1947 one. ... 1947 (MCMXLVII) was a common year starting on Wednesday (the link is to a full 1947 calendar). ... 1995 (MCMXCV) was a common year starting on Sunday of the Gregorian calendar. ... For other uses of the initials WTO, see WTO (disambiguation). ...

American industry and labor prospered after World War II, but hard times set in after 1970. For the first time there was stiff competition from low-cost producers around the globe. Many rust belt industries faded or collapsed, especially the manufacture of steel, TV sets, shoes, toys, textiles and clothing. Toyota and Nissan threatened the giant domestic auto industry. In the late 1970s Detroit and the auto workers union combined to fight for protection. They obtained not high tariffs, but a voluntary restriction of imports from the Japanese government. Quotas were two-country diplomatic agreements that had the same protective effect as high tariffs, but did not invite retaliation from third countries. By limiting the number of Japanese automobiles that could be imported, quotas inadvertently helped Japanese companies push into larger, and more expensive market segments. The Japanese producers, limited by the number of cars they could export to America, opted to increase the value of their exports to maintain revenue growth. This action threatened the American producers' historical hold on the mid- and large-size car markets. 1970 (MCMLXX) was a common year starting on Thursday (the link is to a full 1970 calendar). ... The old steel cable of a colliery winding tower Steel is a metal alloy whose major component is iron, with carbon being the primary alloying material. ... Toyota redirects here. ... Nissan Motor Co. ... Motto: Speramus Meliora; Resurget Cineribus (We Hope For Better Things; It Shall Rise From the Ashes - this motto was adopted after the disastrous 1805 fire that devastated the city) Nickname: The Motor City and Motown Location in Wayne County, Michigan Founded Incorporated July 24, 1701 1815  County Wayne County Mayor...

The GOP under Ronald Reagan and George H.W. Bush abandoned the protectionist ideology, and came out against quotas and in favor of the GATT/WTO policy of minimal economic barriers to global trade. Free trade with Canada came about as a result of the Canada-U.S. Free Trade Agreement of 1987, which led in 1994 to the North American Free Trade Agreement, NAFTA. It was based on George H. W. Bush's plan to enlarge the scope of the market for American firms to include Canada and Mexico. US President Bill Clinton, with strong Republican support, pushed NAFTA through Congress over the vehement objection of labor unions. Likewise in 2000 he worked with Republicans to give China entry into WTO and "most favored nation" trading status (i.e., low tariffs). NAFTA and WTO advocates promoted an optimistic vision of the future, with prosperity to be based on intellectuals skills and managerial know-how more than on routine hand labor. They promised that free trade meant lower prices for consumers. It also meant lower wages and fewer jobs in older industries that could no longer compete. Opposition to liberalized trade came increasingly from labor unions, but their shrinking size and diminished political clout repeatedly left them on the losing side. Ronald Wilson Reagan (February 6, 1911 – June 5, 2004) was the 40th President of the United States (1981–1989) and the 33rd Governor of California (1967–1975). ... Order: 41st President Vice President: Dan Quayle Term of office: January 20, 1989 – January 20, 1993 Preceded by: Ronald Reagan Succeeded by: Bill Clinton Date of birth: June 12, 1924 Place of birth: Milton, Massachusetts First Lady: Barbara Pierce Bush Political party: Republican George Herbert Walker Bush, KBE (born June... The Free Trade Agreement (FTA) was a trade agreement reached by Canada and the United States in October of 1987. ... 1994 (MCMXCIV) was a common year starting on Saturday of the Gregorian calendar, and was designated as the International Year of the Family and the International Year of the Sport and the Olympic Ideal. // Events January Bill Clinton January 1 : North American Free Trade Agreement (NAFTA) goes into effect. ... Nafta or NAFTA may refer to: an acronym for the North American Free Trade Agreement an acronym for the New Zealand Australia Free Trade Agreement the town/Tokyo of Nafta, Tunisia This is a disambiguation page: a list of articles associated with the same title. ... The presidential seal was used by President Hayes in 1880 and last modified in 1959 by adding the 50th star for Hawaii. ... William Jefferson Clinton (born William Jefferson Blythe III on August 19, 1946) was the 42nd President of the United States, serving from 1993 to 2001. ... This article is about the year 2000. ... Look up liberal on Wiktionary, the free dictionary Liberal may refer to: Politics: Liberalism American liberalism, a political trend in the USA Political progressivism, a political ideology that is for change, often associated with liberal movements Liberty, the condition of being free from control or restrictions Liberal Party, members of...

See also

• List of tariffs

This is a list of tariffs and trade legislation Canada 1855 - 1866 - Canadian-American Reciprocity Treaty 1857 - Cayley-Galt Tariff 1871 - The National Policy introduced 1945 - Bretton Woods Agreement 1947 - General Agreement on Tariffs and Trade 1963-1967 - Kennedy round of GATT 1965 - Auto Pact 1973-1979 - Tokyo round of...

References

• Altshuler, Alan A. and Daniel Roos. The Future of the Automobile : The Report of MIT's International Automobile Program. Cambridge, Mass.: MIT Press (1984)
• Doran, Charles F. and Gregory P. Marchildon. The NAFTA Puzzle: Political Parties and Trade in North America (1994)
• Eckes, Alfred. Opening America's Market: U.S. Foreign Trade Policy since 1776 (1995)
• Kaplan, Edward S. American Trade Policy: 1923-1995 (1996) see review
• Schattsneider, E. E. Politics, Pressures and the Tariff (1935).
• Taussig, F. W. Some Aspects of the Tariff Question: An Examination of the Development of American Industries Under Protection (1931)
• Taussig, F. W. The Tariff History of the United States. 8th edition (1931); 5th edition 1910 is online
• Taussig, F.W. "Tariff," Encyclopedia Britannica (11th edition, 1911) vol 26 pp. 422-27.
• Taylor, George Rogers, ed. The Great Tariff Debate, 1820-1830 (1953)
• Terrill, Tom E. The Tariff, Politics, and American Foreign Policy 1874-1901 (1973).
• Tariffs and Trade in U.S. History: An Encyclopedia] (2003, 3 vol) Edited by Elaine C. Prange Turney and Cynthia Clark Northrup. vol 2; vol 3
• Wolman, Paul. Most Favored Nation: The Republican Revisionists and U.S. Tariff Policy, 1897-1912 (1992)