Basic industries are the most sensitive and have been the most affected by tariffs. These industries include pig iron, steel production, and steel sheeting which have provoked and continue to provoke the most adverse effect in this industrial sector to date; with high tariffs and ongoing anti-dumping fights at (WTO). In a historical context the American Civil War is probably the most extreme example on the human cost of tariffs.
In economics terms tariffs translate to protectionism by limiting trade between states through methods such as restrictive quotas, and a variety of other government regulations. Protectionist policies harmfully affect consumers, producers and workers in export sectors as both sides,the country implementing protectionist policies, as well as the countries being protected against.
Commonly, tariffs are taxes imposed on imported goods at border crossings and ports of entry. Tariff rates vary according to the kind of goods imported. Import tariffs make costs higher to importers, and increase the price of imported goods to the domestic economy and also lowering the quantity of goods available in order to favor local producers of substandard goods.
After World War II, the stated policy of most First World countries had been to eliminate protectionism through free trade policies enforced by international treaties and organizations such as the World Trade Organization (WTO) and many other regional trade agreements.
History tells us that “In 1732, England slapped heavy duties on American pig iron, and, in a death blow to the hat industry, decreed that hat makers were forbidden to have more than two apprentices each”. In 1750 Britain prohibited Americans from erecting any mill for rolling or slitting iron; William Pitt exclaimed, “It is forbidden to make even a nail for a horseshoe.” The Declaration of Independence denounced King George for “cutting off our trade with all parts of the world.” Many Founding Fathers recognized the corrupt nature of such restrictions. Benjamin Franklin observed, “Most of the statutes or acts, edicts, arrests, and placards of parliaments, princes, and states, for regulating, directing, or restraining trade, have been either political blunders, or jobs obtained by artful men for private advantage, under pretense of public good.”
Tariffs in the New United States
“The first Congress under the Constitution passed a new tariff in 1789 with an ad- valorem rate of 8 percent; the entire tariff code consisted of a single sheet of rates posted at U.S. custom houses.” However, by the 1980′s, the harmonized tariff code would fill two heavy volumes with more than 8,000 different entries.
American Tariffs of Disgrace
The historical record indicates that sugar tariffs were one of the heaviest burdens on American consumers in the 1820′s. Sugar farmers in Louisiana petitioned Washington to maintain the tariff, claiming that they needed government help in their “war with nature” trying to produce sugar in a climate not ideally suited to it.
Wool was one item that received the most attention from early American protectionism. One of the most primitive industries and perverse practices was the distribution of sheep among congressional districts. As a result, by the 1820′s wool cost twice as much in the United States that did in Britain.
In 1828, Congress passed a disgraceful blow tariff that explicitly sacrificed Southern farmers. Northern manufacturers got almost all the benefits of protection, while Southern farmers were forced to pay higher prices for inferior American products and also lost their cotton foreign markets because of retaliation against the United States’ tariff from abroad.
In 1832 Congress upped the tariffs still higher but backdown and lowered the tariffs after South Carolina declared the new tariff unconstitutional, however, the clash alienated the North and South which helped pave the way for the Civil War.
Tariffs and the Civil War
In the 1850s, during a period of low tariffs, it was recognized as the most prosperous era in American economic history to that point. Nonetheless, the Republican Party would soon put an end to such policies. Abraham Lincoln campaigned on a promise to boost tariffs a key factor for winning the presidency in 1860 but provoking tariff agitation that convinced Southerners that they would be sacrificed for Northern industrialists that led to armed conflict.
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