United States Tariff History

Intro | United States Tariff History | Setting the Stage | The Harding Years | Election of 1928 | Hearings & Proceedings | Aftermath | Lessons | References | Bibliography

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1800's

During the turn of the century, agriculture dominated the US economy. The US experienced low rates on imported goods (5-10 %) yet high custom duties (80-90 %).

War of 1812

• The war caused poor relations between the United States, Great Britain and France
• In response, the US federal government implemented a stuff excise tax to compensate for debt

Tariff of 1816 The Madison Administration

• The US experienced a sole dependence on struggling internalized markets
• Great Britain dumped cheap goods which were smuggled from New England factories during the war
• These goods were sold cheaply in the United States, which hurt the US markets even more, especially New England-based industries
• In response, the US government decided to place a hefty tariff on imported goods to protect US markets
• The average tax rate from the tariff was 20 %
• The Tariff of 1816 set a precedent for future tariffs

What About the South?

• The south opposed the Tariff of 1816
• Their economy depended on exporting cotton to nations such as Great Britain
• Increasing average tax rates on tariffs led to less cotton exports
• 1824, tariff rates increase on average to 30 % which discourages US imports/exports

The Tariff of 1832

• Tariff rates continued to increase against the south's displeasure
• Southern states such as South Carolina nullify the tariffs and threaten to secede from the union
• Tension in Charleston, Andrew Jackson

Tariff of 1857 & Panic of 1857

• The Tariff of 1857 was a response to the Panic of 1857
• Factors leading to the Panic of 1857

      *Britain's decision to remove funds from American banks
      *Astronomical build-up of manufacturing goods in US factories, lay-offs
      *Unsuccessful attempts to building the transcontinental railroad system

• The Tariff of 1857 was Pro-south, reflected a downward tariff reform
• The fed believes that encouraging imports & exports can jump-start our economy
• Average tariff rates fall from 30 % to 20 %
• Robert Walker, Mississippi(D) played a big role in the tariff
• Friendly trade relations between the US and Great Britain were renewed
• As a result, more revenue is generated for the treasury

Tariffs during the Civil War

• 1961, Justin Morrill introduced the Morrill Tariff
• takes a heavy pro-north perspective
• average tariff rate reaches as high as 47 percent
• Due to unjustifiable misrepresentation, seven southern states secede from the union
• believed that the northern states consumed the bulk of revenue generated from tariffs

Reconstruction Era

• Grant Administration, sharp decline in average tariff rates (10 %)
• 1890, Republican senator William McKinley introduces a tariff with an average rate of 48 %!
• Tariff rates continued to fluctuate into the turn of the century
• The conflict of protectionism continues

Pre-World War I Era

• Fluctuations of tariff rates continue with following tariffs

    *1897, Dingley Tariff. McKinley administration, pro-protectionism, rates raise to 57 %
    *1909, Payne-Aldrich Tariff. Taft administration, anti-protectionism, rates drop
    *1913, Underwood-Simmons Tariff. Wilson administration, anti-protectionism, rates drop

• Anti-protectionists critique downward revision tariffs by saying they contibuted to World War I, false accusation