The editor of The American Conservative, Robert W. Merry takes readers on a tour of the history of American trade policies, highlighting what worked, what didn’t and what was controversial. He warns that despite long periods of calm in trade relations, flare ups are inevitable. Merry writes (abridged):
America’s first great protectionist political figure was Alexander Hamilton, George Washington’s treasury secretary. And compared to later mercantilist politicians in our history, Hamilton wasn’t even that much of a protectionist. His original U.S. tariff bill imposed an average taxation level of just 8.5 percent on imported goods.
Therein lay the first stirrings of the great trade debate that has reverberated through our history, down to our own time and to President Trump’s announcement last week that he intends to slap protective tariffs on imported steel and aluminum.
No one abhorred this governmental philosophy more ardently than Thomas Jefferson, who opposed high levels of governmental intrusiveness into the private economy. Such policies, he argued, would inevitably lead to special privileges for the favored few. He wanted to keep tax levels as low as possible and reduce federal interference so the people could build up the nation from below. Jefferson’s arguments were later taken up in powerful ways by Andrew Jackson.
The Hamilton-Clay forces won the first round in the tariff wars, with passage during the John Quincy Adams administration of legislation that slapped high duties on iron, molasses, distilled spirits, flax, and various finished goods. Northerners loved it, while Southerners hated it.
President Reagan, far more deft on far more issues than he has received credit for, crafted an approach that precluded the blunt instrument of the old-fashioned tariff. Instead he worked towards voluntary restrictions based on import quotas arrived at through diplomatic agreements (not unlike McKinley’s reciprocity concept).
The fluctuating history of U.S. trade policy demonstrates that, while this issue may seem settled for extended periods, it will never remain under control indefinitely. The decline of industrial America, and the devastation it has wreaked in so many heartland areas of the country, has spawned a powerful backlash that contributed to the election of Donald Trump.
Whether Trump’s old-fashioned tariff approach can reverse that devastation and revive America’s industrial capacity remains an open question. But it seems clear that, if he can’t find a way to incorporate some of the reciprocity thinking of William McKinley and Ronald Reagan, he will almost surely fail.
Read more here.
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