Tariff in United States history

The Democrats won in 1845, electing James K. Polk as president. Polk succeeded in passing the Walker tariff of 1846 by uniting the rural and agricultural factions of the entire country for lower tariffs. They sought a level 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 actually increased trade with Britain and others and brought in more revenue to the federal treasury than the higher tariff. The average tariff on the Walker Tariff was about 25%. While protectionists in Pennsylvania and neighboring states were angered, the South achieved its goal of setting low tariff rates before the Civil War.[32]

The Walker Tariff remained in place until 1857, when a nonpartisan coalition lowered them again with the Tariff of 1857 to 18%. This was in response to the British repeal of their protectionist "Corn Laws".[33]

The Democrats in Congress, dominated by Southern Democrats, wrote and passed the tariff laws in the 1830s, 1840s, and 1850s, and kept reducing rates, so that the 1857 rates were down to about 15%, a move that boosted trade so overwhelmingly that revenues actually increased, from just over $20 million in 1840 ($0.5 billion in 2021 dollars), to more than $80 million by 1856 ($1.9 billion).[34] The South had almost no complaints but the low rates angered many Northern industrialists and factory workers, especially in Pennsylvania, who demanded protection for their growing iron industry. The Republican Party replaced the Whigs in 1854 and also favored high tariffs to stimulate industrial growth; it was part of the 1860 Republican platform.[35]

After the Second Party System ended in 1854 the Democrats lost control and the new Republican Party had its opportunity to raise rates. The Morrill Tariff significantly raising tariff rates became possible only after the Southern Senators walked out of Congress when their states left the Union, leaving a Republican majority. It was signed by Democratic President James Buchanan in early March 1861 shortly before President Abraham Lincoln took office. Pennsylvania iron mills and New England woolen mills mobilized businessmen and workers to call for high tariffs, but Republican merchants wanted low tariffs. The high tariff advocates lost in 1857, but stepped up their campaign by blaming the economic recession of 1857 on the lower rates. Economist Henry Charles Carey of Philadelphia was the most outspoken advocate, along with Horace Greeley and his influential newspaper, the New York Tribune. Increases were finally enacted in February 1861 after Southerners resigned their seats in Congress on the eve of the Civil War.[36][37]

Some historians in recent decades have minimized the tariff issue as a cause of the war, noting that few people in 1860–61 said it was of central importance to them. Compromises were proposed in 1860–61 to save the Union, but they did not involve the tariff.[38] Arguably, the effects of a tariff enacted in March 1861 could have made little effect upon any delegation which met prior to its signing. It is indicative of the Northern industrial supported and anti-agrarian position of the 1861 Republican-controlled congress. Some secessionist documents do mention a tariff issue, though not nearly as often as the preservation of the institution of slavery. However, a few libertarian economists place more importance on the tariff issue.[39] The arguments that tariffs were a major cause of the Civil War have become a staple of the Lost Cause of the Confederacy.

During the war far more revenue was needed, so the rates were raised again and again, along with many other taxes such as excise taxes on luxuries and income taxes on the rich.[40] By far most of the wartime government revenue came from bonds and loans ($2.6 billion), not taxes ($357 million) or tariffs ($305 million).[41]

The Morrill Tariff took effect a few weeks before the war began on April 12, 1861, and was not collected in the South. The Confederate States of America (CSA) passed its own tariff of about 15% on most items, including many items that previously were duty-free from the North. Previously tariffs between states were prohibited. The Confederates believed that they could finance their government by tariffs. The anticipated tariff revenue never appeared as the Union Navy blockaded their ports and the Union army restricted their trade with the Northern states. The Confederacy collected a mere $3.5 million in tariff revenue from the Civil War start to end and had to resort to inflation and confiscation instead for revenue.[42]

Historian Howard K. Beale argued that high tariffs were needed during the Civil War, but were retained after the war for the benefit of Northern industrialists, who would otherwise lose markets and profits. To keep political control of Congress, Beale argued, Northern Industrialists worked through the Republican Party and supported Reconstruction policies that kept low-tariff Southern whites out of power. The Beale thesis was widely disseminated by the influential survey of Charles A. Beard, The Rise of American Civilization (1927).[43][44]

In the late 1950s historians rejected the Beale–Beard thesis by showing that Northern businessmen were evenly divided on the tariff, and were not using Reconstruction policies to support it.[45][46]

The iron and steel industry, and the wool industry, were the well-organized interests groups that demanded (and usually obtained) high tariffs through support of the Republican Party. Industrial workers had much higher wages than their European counterparts, and they credited it to the tariff and voted Republican.[47]

Democrats were divided on the issue, in large part because of pro-tariff elements in the Pennsylvania party who wanted to protect the growing iron industry, as well as pockets of high tariff support in nearby industrializing states.[48] However President Grover Cleveland made low tariffs the centerpiece of Democratic Party policies in the late 1880s. His argument is that high tariffs were an unnecessary and unfair tax on consumers. The South and West generally supported low tariffs, and the industrial East high tariffs.[49] Republican William McKinley was the outstanding spokesman for high tariffs, promising it would bring prosperity for all groups.[50][51]

After the Civil War, high tariffs remained as the Republican Party remained in office and the Southern Democrats were restricted from office. 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 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 tariff rate on imported wool—a tariff the American manufacturers had to pay—together with a high tariff on finished woolens and worsted goods.[52]

Apart from wool and woolens, American industry and agriculture—and industrial workers—had become the most efficient in the world in most industries by the 1880s as they took the lead in the Industrial Revolution. No other country had the industrial capacity, large market, high efficiency and low costs, or the complex distribution system needed to compete in most markets in the vast American market. Most imports were a few "luxury" goods. Indeed, it was the British who watched cheaper American products flooded their home islands. The London Daily Mail in 1900 complained:

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, some American manufacturers and union 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 paid much more making possible the U.S steel industry's massive investment to expand capacity and switch to the Bessemer process and later to the open hearth furnace. Between 1867 and 1900 U.S. steel production increased more than 500 times from 22,000 tons to 11,400,000 tons and Bessemer steel rails, first made in the U.S that would last 18 years under heavy traffic, would come to replace the old wrought iron rail that could only endure two years under light service.[53] Taussig says that in 1881, British steel rails sold for $31 a ton, and if Americans imported them they paid a $28/ton tariff, giving $59/ton for an imported ton of rails. American mills charged $61/ton and made a good profit, which was then reinvested into increased capacity, higher quality steels, higher wages and benefits and more efficient production.[54] By 1897 the American steel rail price had dropped to $19.60 per ton compared to the British price at $21.00—not including the $7.84 duty charge—demonstrating that the tariff had performed its purpose of giving the industry time to become competitive.[55] Then the U.S. steel industry became an exporter of steel rail to England selling below the British price and during WW I would become the largest supplier of steel to the allies. From 1915 through 1918, the largest American steel company, U.S. Steel, alone delivered more steel each year than Germany and Austria-Hungary combined, totaling 99,700,000 tons during WW I.[56] 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 longer any economic rationale.[52]

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."[57] The election of 1888 was fought primarily over the tariff issue, and Cleveland lost.[58] Republican Congressman William McKinley argued,

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 ripped apart the Democratic party. Cleveland and the pro-business Bourbon Democrats 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 constituents. 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 (it became law anyway).[59]

President Teddy Roosevelt watches GOP team pull apart on tariff issue.

McKinley campaigned heavily in 1896 on the high 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 government sponsored "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.[60] The Republicans split bitterly on the Payne–Aldrich Tariff of 1909. Republican President Theodore Roosevelt (1901–1909) saw the tariff issue was ripping his party apart, so he postponed any consideration of it. The delicate balance flew apart on under Republican William Howard Taft. He campaigned for president 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 mobilized high-rate Senators. 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" 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.[61][62]

By 1913 with the new income tax generating revenue, the Democrats in Congress were able to reduce rates with the Underwood Tariff. The outbreak of war in 1914 made the impact of tariffs of much less importance compared to war contracts. When the Republicans returned to power they returned the rates to a high level in the Fordney–McCumber Tariff of 1922. The next raise came with the Smoot–Hawley Tariff Act of 1930 at the start of the Great Depression.

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 1911 federal election. 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, under the leadership of Robert Borden, 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.[63]

The years 1920 to 1929 are generally misdescribed as years in which protectionism increased in Europe. In fact, from a general point of view, the crisis was preceded in Europe by trade liberalisation. The weighted average of tariffs remained tendentially the same as in the years preceding the First World War: 24.6% in 1913, as against 24.9% in 1927. In 1928 and 1929, tariffs were lowered in almost all developed countries.[72] In addition, the Smoot-Hawley Tariff Act was signed by Hoover on June 17, 1930, while the Wall Street crash took place in the fall of 1929. Most of the trade contraction occurred between January 1930 and July 1932, before most protectionist measures were introduced (except for the limited measures applied by the United States in the summer of 1930). In the view of Maurice Allais, it was therefore the collapse of international liquidity that caused the contraction of trade, not customs tariffs.[73]

Milton Friedman also held the opinion that the Smoot–Hawley tariff of 1930 did not cause the Great Depression. Douglas A. Irwin writes : "most economists, both liberal and conservative, doubt that Smoot Hawley played much of a role in the subsequent contraction."[74]

Peter Temin, explains a tariff is an expansionary policy, like a devaluation as it diverts demand from foreign to home producers. He notes that exports were 7 percent of GNP in 1929, they fell by 1.5 percent of 1929 GNP in the next two years and the fall was offset by the increase in domestic demand from tariff. He concludes that contrary the popular argument, contractionary effect of the tariff was small. (Temin, P. 1989. Lessons from the Great Depression, MIT Press, Cambridge, Mass)[75]

William J. Bernstein wrote:

Between 1929 and 1932, real GDP fell 17 percent worldwide, and by 26 percent in the United States, but most economic historians now believe that only a minuscule part of that huge loss of both world GDP and the United States’ GDP can be ascribed to the tariff wars. .. At the time of Smoot-Hawley's passage, trade volume accounted for only about 9 percent of world economic output. Had all international trade been eliminated, and had no domestic use for the previously exported goods been found, world GDP would have fallen by the same amount — 9 percent. Between 1930 and 1933, worldwide trade volume fell off by one-third to one-half. Depending on how the falloff is measured, this computes to 3 to 5 percent of world GDP, and these losses were partially made up by more expensive domestic goods. Thus, the damage done could not possibly have exceeded 1 or 2 percent of world GDP — nowhere near the 17 percent falloff seen during the Great Depression... The inescapable conclusion: contrary to public perception, Smoot-Hawley did not cause, or even significantly deepen, the Great Depression.[76]

Paul Krugman writes that protectionism does not lead to recessions. According to him, the decrease in imports (which can be obtained by the introduction of tariffs) has an expansionary effect, i.e. favourable to growth. Thus in a trade war, since exports and imports will decrease equally, for the whole world, the negative effect of a decrease in exports will be compensated by the expansionary effect of a decrease in imports. A trade war therefore does not cause a recession. Furthermore, he notes that the Smoot-Hawley tariff did not cause the Great Depression. The decline in trade between 1929 and 1933 "was almost entirely a consequence of the Depression, not a cause. Trade barriers were a response to the Depression, in part a consequence of deflation."[77]

Tariffs up to the Smoot–Hawley Tariff Act of 1930, were set by Congress after many months of testimony and negotiations. In 1934, the U.S. Congress, in a rare delegation of authority, passed the Reciprocal Tariff Act of 1934, which authorized the executive branch to negotiate bilateral tariff reduction agreements with other countries. The prevailing view then was that trade liberalization may help stimulate economic growth. However, no one country was willing to liberalize unilaterally. Between 1934 and 1945, the executive branch negotiated over 32 bilateral trade liberalization agreements with other countries. The belief that low tariffs led to a more prosperous country are now the predominant belief with some exceptions. Multilateralism is embodied in the seven tariff reduction rounds that occurred between 1948 and 1994. In each of these "rounds", all General Agreement on Tariffs and Trade (GATT) members came together to negotiate mutually agreeable trade liberalization packages and reciprocal tariff rates. In the Uruguay round in 1994, the World Trade Organization (WTO) was established to help establish uniform tariff rates.

Currently only about 30% of all import goods are subject to tariffs in the United States, the rest are on the free list. The "average" tariffs now charged by the United States are at a historic low. The list of negotiated tariffs are listed on the Harmonized Tariff Schedule as put out by the United States International Trade Commission.[78]

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.

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.[79]

The Chicken tax was a 1964 response by President Lyndon B. Johnson to tariffs placed by Germany (then West Germany) on importation of US chicken. Beginning in 1962, during the President Kennedy administration, the US accused Europe of unfairly restricting imports of American poultry at the request of West German chicken farmers. Diplomacy failed, and in January 1964, two months after taking office, President Johnson retaliated by imposing a 25 percent tax on all imported light trucks. This directly affected the German built Volkswagen vans. Officially it was explained that the light trucks tax would offset the dollar amount of imports of Volkswagen vans from West Germany with the lost American sales of chickens to Europe. But audio tapes from the Johnson White House reveal that in January 1964, President Johnson was attempting to convince United Auto Workers's president Walter Reuther, not to initiate a strike just prior the 1964 election and to support the president's civil rights platform. Reuther in turn wanted Johnson to respond to Volkswagen's increased shipments to the United States.[80]

China gained entry to the WTO as Most favoured nation in early 2000s.

During the Reagan and George H. W. Bush administrations Republicans abandoned protectionist policies, 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 Reagan's plan to enlarge the scope of the market for American firms to include Canada and Mexico. President Bill Clinton, with strong Republican support in 1993, pushed NAFTA through Congress over the vehement objection of labor unions.[81][82]

Likewise, in 2000 Clinton worked with Republicans to give China entry into WTO and "most favored nation" trading status (i.e., the same low tariffs promised to any other WTO member). 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. Opposition to liberalized trade came increasingly from labor unions, who argued that this system also meant lower wages and fewer jobs for American workers who could not compete against wages of less than a dollar an hour. The shrinking size and diminished political clout of these unions repeatedly left them on the losing side.[83]

Despite overall decreases in international tariffs, some tariffs have been more resistant to change. For example, due partially to tariff pressure from the European Common Agricultural Policy, US agricultural subsidies have seen little decrease over the past few decades, even in the face of recent pressure from the WTO during the latest Doha talks.[84]

On March 5, 2002, President George W. Bush placed tariffs on imported steel.

The Economic Policy Institute, a left-leaning think tank, has claimed that free trade created a large trade deficit in the United States for decades which lead to the closure of many factories and cost the United States millions of jobs in the manufacturing sector. Moreover, trade deficits lead to significant wage losses, not only for workers in the manufacturing sector, but also for all workers throughout the economy who do not have a university degree. For example, in 2011, 100 million full-time, full-year workers without a university degree suffered an average loss of $1,800 (~$2,342 in 2022) on their annual salary.[85] [86] Indeed According to the Economic Policy Institute, these workers who have lost their jobs in the manufacturing sector and who have to accept a reduction in their wages to find work in other sectors, are creating competition that reduces the wages of workers already employed in these other sectors. In addition, the threat of relocation of production facilities leads workers to accept wage cuts to keep their jobs.[86]

According to the Economic Policy Institute, trade agreements have not reduced trade deficits but rather increased them. The growing trade deficit with China comes from China's manipulation of its currency, dumping policies, subsidies, trade barriers that give it a very important advantage in international trade. In addition, industrial jobs lost by imports from China are significantly better paid than jobs created by exports to China. So even if imports were equal to exports, workers would still lose out on their wages.[87]

According to the Economic Policy Institute, the manufacturing sector is a sector with very high productivity growth, which promotes high wages and good benefits for its workers. Indeed, this sector accounts for more than two thirds of private sector research and development and employs more than twice as many scientists and engineers as the rest of the economy. The manufacturing sector therefore provides a very important stimulus to overall economic growth. Manufacturing is also associated with well-paid service jobs such as accounting, business management, research and development and legal services. Deindustrialisation is therefore also leading to a significant loss of these service jobs. Deindustrialization thus means the disappearance of a very important driver of economic growth.[87]

However, other groups such as the CATO Institute, a libertarian or right-leaning think tank, write the opposite. They have said that free trade is not a significant contributor to deindustrialization trends.[88] Trade can lead to loss of low-skilled or superfluous manufacturing jobs, but these tend to be replaced by higher-paying, higher-skilled manufacturing jobs in other sectors where the U.S. has a competitive advantage.[89] While trade may have exacerbated some aspects of the deindustrialization seen in America since the 1980s, increased productivity and factory automation played a much more significant role. Moreover, some aspects of deindustrialization are illusionary, as many factories moved out of high-visibility and concentrated urban areas to rural areas, thus giving an impression of jobs being lost when there simply moved elsewhere in the U.S.[90]

According to the PIIE, a think tank promoting free trade, evidence shows that trade agreements do not have significant impacts on trade deficits, and can even close the trade gap between countries.[91]

"I use no porter or cheese in my family, but such as is made in America," the inaugural President George Washington wrote, boasting that these domestic products are "of an excellent quality." One of the first acts of Congress Washington signed was a tariff among whose stated purpose was "the encouragement and protection of manufactures."[92] In his 1790 State of the Union Address, Washington justified his tariff policy for national security reasons:

A free people ought not only to be armed, but disciplined; to which end a uniform and well-digested plan is requisite; and their safety and interest require that they should promote such manufactories as tend to render them independent of others for essential, particularly military, supplies[93]

As President Thomas Jefferson wrote in explaining why his views had evolved to favor more protectionist policies: "In so complicated a science as political economy, no one axiom can be laid down as wise and expedient for all times and circumstances, and for their contraries."[94]

After the War of 1812, Jefferson's position began to resemble that of Washington, some level of protection was necessary to secure the nation's political independence. He said:[94]

experience has taught me that manufactures are now as necessary to our independence as to our comfort: and if those who quote me as of a different opinion will keep pace with me in purchasing nothing foreign where an equivalent of domestic fabric can be obtained, without regard to difference of price[95]

In 1832, then the United States Senator from Kentucky, Henry Clay said about his disdain for "free traders" that "it is not free trade that they are recommending to our acceptance. It is in effect, the British colonial system that we are invited to adopt; and, if their policy prevail, it will lead substantially to the re-colonization of these States, under the commercial dominion of Great Britain."[96] Clay said:

When gentlemen have succeeded in their design of an immediate or gradual destruction of the American System, what is their substitute? Free trade! Free trade! The call for free trade is as unavailing as the cry of a spoiled child, in its nurse's arms, for the moon, or the stars that glitter in the firmament of heaven. It never has existed; it never will exist. Trade implies, at least two parties. To be free, it should be fair, equal and reciprocal.[96]

Clay explained that "equal and reciprocal" free trade "never has existed; [and] it never will exist." He warned against practicing "romantic trade philanthropy… which invokes us to continue to purchase the produce of foreign industry, without regard to the state or prosperity of our own." Clay that he was "utterly and irreconcilably opposed" to trade which would "throw wide open our ports to foreign productions" without reciprocation.[97]

In 1822, President James Monroe observed that "whatever may be the abstract doctrine in favor of unrestricted commerce," the conditions necessary for its success—reciprocity and international peace—"has never occurred and can not be expected." Monroe said, "strong reasons… impose on us the obligation to cherish and sustain our manufactures."[98]

President Abraham Lincoln declared, "Give us a protective tariff and we will have the greatest nation on earth." Lincoln warned that "the abandonment of the protective policy by the American Government… must produce want and ruin among our people."[99]

Lincoln similarly said that, "if a duty amount to full protection be levied upon an article" that could be produced domestically, "at no distant day, in consequence of such duty," the domestic article "will be sold to our people cheaper than before."[99]

Additionally, Lincoln argued that based on economies of scale, any temporary increase in costs resulting from a tariff would eventually decrease as the domestic manufacturer produced more. Lincoln did not see a tariff as a tax on low-income Americans because it would only burden the consumer according to the amount the consumer consumed. By the tariff system, the whole revenue is paid by the consumers of foreign goods... the burthen of revenue falls almost entirely on the wealthy and luxurious few, while the substantial and laboring many who live at home, and upon home products, go entirely free.[100]

Lincoln argued that a tariff system was less intrusive than domestic taxation: The tariff is the cheaper system, because the duties, being collected in large parcels at a few commercial points, will require comparatively few officers in their collection; while by the direct tax system, the land must be literally covered with assessors and collectors, going forth like swarms of Egyptian locusts, devouring every blade of grass and other green thing.[101]

President William McKinley stated the United States' stance under the Republican Party as:

Under free trade the trader is the master and the producer the slave. Protection is but the law of nature, the law of self-preservation, of self-development, of securing the highest and best destiny of the race of man.[102] [It is said] that protection is immoral.... Why, if protection builds up and elevates 63,000,000 [the U.S. population] of people, the influence of those 63,000,000 of people elevates the rest of the world. We cannot take a step in the pathway of progress without benefiting mankind everywhere[103]

[Free trade] destroys the dignity and independence of American labor... It will take away from the people of this country who work for a living—and the majority of them live by the sweat of their faces—it will take from them heart and home and hope. It will be self-destruction.[104]

He also categorically rejected the "cheaper is better" argument:

They [free traders] say, 'Buy where you can buy the cheapest.' That is one of their maxims… Of course, that applies to labor as to everything else. Let me give you a maxim that is a thousand times better than that, and it is the protection maxim: 'Buy where you can pay the easiest.' And that spot of earth is where labor wins its highest rewards.[105]

They say, if you had not the Protective Tariff things would be a little cheaper. Well, whether a thing is cheap or whether it is dear depends on what we can earn by our daily labor. Free trade cheapens the product by cheapening the producer. Protection cheapens the product by elevating the producer.[105]

The protective tariff policy of the Republicans... has made the lives of the masses of our countrymen sweeter and brighter, and has entered the homes of America carrying comfort and cheer and courage. It gives a premium to human energy, and awakens the noblest aspiration in the breasts of men. Our own experience shows that it is the best for our citizenship and our civilization and that it opens up a higher and better destiny for our people.[106]

President Theodore Roosevelt believed that America's economic growth was due to the protective tariffs, which helped her industrialize. He acknowledged this in his State of the Union address from 1902:

The country has acquiesced in the wisdom of the protective-tariff principle. It is exceedingly undesirable that this system should be destroyed or that there should be violent and radical changes therein. Our past experience shows that great prosperity in this country has always come under a protective tariff.[107]

The Trump tariffs were imposed by executive order (not by act of Congress) during the presidency of Donald Trump as part of his economic policy. In January 2018, Trump imposed tariffs on solar panels and washing machines of 30 to 50 percent.[108] He soon imposed tariffs on steel (25%) and aluminum (10%) from most countries.[109][110] On June 1, 2018, this was extended on the European Union, Canada, and Mexico.[110] Separately, on May 10, the Trump administration set a tariff of 25% on 818 categories of goods imported from China worth $50 billion (~$53.6 billion in 2021).[111] The only country which remained exempt from the steel and aluminum tariffs was Australia. Argentinian and Brazilian aluminium tariffs were started on December 2, 2019 in reaction to currency manipulation.[112]