Gordon S. Barker
That is the second publish in a sequence on tariffs based mostly on a roundtable organized at Bishop’s College in February 2025. Learn the introduction by David Webster right here and the primary publish by Heather McKeen-Edwards right here.
Donald Trump’s transactional use of tariffs doesn’t break new floor. In truth, tariffs have performed an instrumental function in American nation constructing for some 2 hundred and fifty years. Tariffs have been a hotly debated concern throughout the “Essential Interval” beneath the Articles of Confederation because the New Republic sought to ascertain itself in the neighborhood of countries and construct its personal nationwide market. After the Philadelphia Conference of 1787 and the adoption of the American Structure, tariffs lay on the coronary heart of the controversies between Alexander Hamilton and Thomas Jefferson, which divided George Washington’s first administration. Hamilton noticed a tariff as a vital nation-building device and set out his imaginative and prescient within the Report on Manufactures submitted to Congress in 1793. Washington’s secretary of the treasury believed tariff safety, a nationwide financial institution, and a program of inside enhancements have been key pillars for financial progress and positioning the New Nation within the world group. In distinction, Jefferson rejected tariffs. The Sage of Monticello embraced a imaginative and prescient of an agrarian republic that had entry to low-cost manufacturing imports to supply the infrastructure wanted to develop agricultural manufacturing and maintain commodity exports to worldwide markets.
Learn extra: The Legacy of Tariffs in US historical past: Renewing the McKinley-Hawaii Technique?
Though tariffs remained a difficulty throughout the Jefferson and James Madison presidencies, the Panic of 1819 and the top of the so-called Period of Good Emotions set the stage for tariffs to as soon as once more take heart stage, particularly in a interval of marked polarization that birthed the Second Social gathering System that pitted Jackson’s Democrats and towards Whigs who opposed Outdated Hickory and branded him King Andrew. The tariff of 1828, which noticed the common fee attain a report stage of 49 p.c, grew to become referred to as the “Tariff of Abominations,” and uncompromising leaders railed towards one another precipitating the Nullification Disaster and Jackson’s Pressure Invoice, which resonated throughout an more and more divided nation, even after the adoption of a compromise tariff in 1833 that lowered the common fee to about 20 p.c. Even at that stage, nonetheless, the compromise tariff helped gasoline sectional variations ignited additionally by Jackson’s Financial institution Warfare and more and more by the rising divide on the query of slavery within the western territories after the annexation of Texas, the Mexican Cession, and the Gadsden Buy.
It was towards this background that one other financial downturn, branded the Panic of 1857, ushered within the Morill Tariff, which took the common tariff fee again as much as 47 p.c, marginally beneath the 1828 report, presumably to revive the well being of northern trade and commerce, which had been devastated by the collapse of Northeast banks and insurance coverage corporations, in addition to plummeting commodity costs—except for cotton. In a post-Dred Scott period of rising Southern Nationalism, the Morill Tariff accentuated sectional animosities, which worsened after the early morning photographs at Fort Sumter, continued after Robert E. Lee’s give up at Appomattox, and later contributed to the failure of Radical Reconstruction. Confederates and their sympathizers within the North argued the Lincoln administration maintained the Morill Tariff to finance the struggle effort, and so they burdened to English and European diplomats from whom they sought worldwide recognition for the Confederacy that the Union tariff punished British and continental European exports. The Morill Tariff thus grew to become central in Civil Warfare Period diplomacy, notably when Lincoln nervous a few attainable two-front struggle following the Trent Disaster with Britain that noticed Lord Palmerston resolve to fortify the Canadian border with 10,000 British regulars and develop Royal Navy’s Caribbean fleet.
The speedy progress of the US financial system throughout the postbellum interval, spurred by a second industrial revolution centered primarily in America and Germany, Gilded Age laissez-faire financial coverage, and the conclusion of America’s Manifest Future from “Sea to Shining Sea” with transcontinental railroads spanning the continent diminished Republican and Democrat sensibilities on tariffs till the final decade of the nineteenth century. Within the Eighteen Nineties, nonetheless, the tariff concern returned with a vengeance reflecting the significance of full lunch pails for staff following a number of main labor disputes, together with the Homestead and Pullman strikes, and rising competitors for management of worldwide markets and uncooked supplies in an period of imperialist competitors between main European nations and the US. On this aggressive surroundings, tariffs additionally served as a method for American policymakers to answer new and typically highly effective lobbies. The McKinley Tariff of 1890, for instance, elevated tariffs from a median of 38% to 50%, however it eliminated duties on sugar—initially a response to an enchantment by American pursuits in Cuba. The McKinley Tariff, nonetheless, additionally had essential strategic implications for extending America’s attain into the Pacific by way of the annexation of Hawai’i, then an unbiased nation. Hawai’i and America had signed a reciprocal commerce settlement some 5 years earlier, which gave Hawaiian sugar producers favorable entry to the US market. When the McKinley Tariff eradicated duties on sugar, producers in Hawai’i misplaced their benefit and have been compelled to compete with low-cost producers in Cuba who have been nearer to America’s massive jap seaboard metropolitan markets and with home producers who have been accorded a bounty to permit them to stay aggressive within the American market. The ramifications for the Hawaiian financial system have been dire and, not surprisingly, American sugar pursuits within the islands clamored for annexation, declaring it the one method to save a collapsing financial system, regardless of sturdy protests from Native Hawaiians who feared immersion and assimilation by their dominating American neighbor—fears that can’t be divorced from these felt by Canadians immediately as they confront financial dislocations related to the Trump administration’s tariff coverage and a president calling for Canada to develop into the 51st state and saying that’s the solely positive means for Canadian suppliers to have assured free entry to much-needed American markets. The message for Canadians immediately—because it was for Hawaiians within the late nineteenth century—stays the identical: full lunch pails can solely be achieved by turning into a part of America.
The Wilson Gorman Tariff of 1894 noticed a slight discount within the McKinley Tariff, reflecting the Democratic Social gathering’s want for decrease tariffs, however it additionally supplied for a 2 p.c revenue tax to offset the income loss from the tariff discount. Previous to 1932 and the emergence of an essential labor constituency within the Democratic Social gathering, Democrats constantly favored decrease tariffs. The Wilson Gorman Tariff’s 2 p.c revenue tax, nonetheless, was declared unconstitutional. It’s also essential to notice that the Wilson Gorman Tariff was enacted at a time when the American financial system struggled with probably the most vital financial downturn within the Nation’s historical past, the Nice Despair of 1893-1896. It was additionally a time when American expansionist policymakers had come to know that America’s big manufacturing plant and rising agricultural capabilities meant that America wanted world markets to keep up working charges, employment ranges, and social stability, and, most essential, that America could be the best beneficiary of free multilateral buying and selling preparations. The nineteenth century thus ended with Secretary of State John Hay penning his “Open Door Notes” calling for open entry to markets and uncooked supplies not solely within the Pacific Rim but additionally in Africa and Europe. Hay’s Notes introduced a brand new period of tariff administration at house and overseas as a method of nation constructing and guaranteeing the development of American financial pursuits. Tariff administration required America to go world and United States leaders to name for decrease tariffs worldwide. On this vein, the 1913 Underwood Simmons Tariff, enacted after the Sixteenth Modification, lowered the American tariff to a median of 25 p.c and launched an revenue tax. The Underwood Simmons Tariff was instrumental in funding America’s participation in World Warfare I. It additionally later knowledgeable Woodrow Wilson’s 14-Level imaginative and prescient set out at Versailles.
As a troubled America cried out for a return to normalcy after the dislocation of World Warfare I, a tough readjustment to peace, and the devastating 1919 flu epidemic that swept the Atlantic World, the Republican administrations of Warren Harding and Calvin Coolidge launched into a pointy flip away from America’s embrace of multilateralism and decrease tariffs. The Fordney McCumber Tariff of 1922 licensed the president to boost tariffs as much as 50 p.c, supposedly to supply American producers wanted safety and permit them to compete with overseas suppliers. Within the Republicans’ push for normalcy, additionally they adopted a regressive stance on immigration passing the Emergency Quota Acts of 1921 and 1924 in addition to the Nationwide Origins Act of 1924 aimed particularly at proscribing non-traditional Anglo-Protestant immigration. These insurance policies formed an period of renewed conservatism till the Nice Crash of 1929 ushered in an financial collapse exacerbated by mud bowl circumstances that additional diminished agricultural manufacturing. American producers and farmers confronted unprecedented declines in demand at house and overseas. Ignoring recommendation from main economists who recommended towards enacting larger tariffs and lobbied the federal government and revealed newspaper articles denouncing tariffs, Herbert Hoover’s administration handed the Hawley-Smoot Tariff hitting some 900 manufacturing gadgets and 70 farm merchandise with common tariffs that rose from 40 to 60 p.c.
It took a decade, together with one other downturn in 1937, the Roosevelt Recession, earlier than American Gross Nationwide Product returned to pre-crash ranges. By this time, President Franklin Delano Roosevelt had framed his Atlantic Constitution imaginative and prescient for America’s entry into the World Warfare II and a brand new imaginative and prescient for the postwar world. As Patrick Hearden so aptly factors out, FDR sought to construct an arsenal for democracy to confront “the nightmare of a closing world.”[1] The Atlantic Constitution imaginative and prescient, agreed to with Winston Churchill off the shores of Newfoundland in 1941, was in some ways a reintroduction of Wilson’s embrace of multilateralism and free commerce following World Warfare I. It appealed to Individuals nervous about postwar dislocations and maybe slipping again into recession and even one other extended melancholy. Individuals thus welcomed a free buying and selling, multilateral world through which American trade and manufacturing would prosper, particularly reconstructing war-torn landscapes in Europe and Japan and assuming world financial, political, and navy management. Within the last decade of the 20 th century, the exact same American multilateralism, supported by Republicans and Democrats alike, underpinned the 1994 North American Free Commerce Settlement (NAFTA) and sought to combine the economies of the US, Canada, and Mexico to contribute to their financial progress and the wellbeing of their populations. Greater than 2 hundred years after the Founding, tariff administration stays central to American nation constructing, worldwide relations, and financial coverage. That is notably true given the elevated integration of the American, Canadian, and Mexican economies post-NAFTA, which has successfully made provide chains in key North American manufacturing industries transnational.
successfully made provide chains in key sectors transnational.
Gordon S. Baker is a graduate of McGill College (BA Distinction in Economics, BA Honours Historical past) and the Faculty of William and Mary (MA, PhD in Historical past), Gordon S. Barker has been instructing at Bishop’s College since 2006. He has authored three main books, a number of chapters in peer-reviewed volumes, in addition to articles and critiques in main scholarly journals. His newest e-book, with Sophie A. Brady, is titled Black Ladies Freedom Fighters: Profiles within the Battle Towards Slavery (McFarland Publishers, 2025).
[1] https://activehistory.ca/?p=41270&preview=1&_ppp=5e4b8723aa
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