AMERICA WAS BUILT ON TARIFFS
18th century Britain’s mercantilism dictated that its colonies were to be a source of raw goods, not finished products. This led to Parliament passing the Molasses Act of 1733 and the Sugar Act of 1764, intended to protect domestic industry on the British Isles. It was the new tax contained in the Stamp Act of 1765 that was finally too much for the colonists to bear, but tariffs had built up their resentment for decades. Finally pushed over the edge, America had a revolution, George Washington kicked King George’s men out of Yorktown, and a new nation was born. But guess what the new government turned its attention to in 1789? The second official act – right after oaths of office – that the new Congress took was passing the following legislation: “Whereas it is necessary for that support of government, for the discharge of the debts of the United States, and the encouragement and protection of manufactures, that duties be laid on goods, wares and merchandise” Tariffs! The very first law the American Congress ever passed was to raise revenue (it
These days, tariffs are treated like a bad word. They are to be avoided, condemned, and shunned. Tweed-clad economists get visibly agitated when discussing them on television. Think-tankers in the Acela corridor scoff at them as a “tax on consumers” that “makes us poorer.” And because President Trump has made tariffs a central piece of his economic agenda – especially in our relationship with China – they have become a hot button political issue too. But whether you are an ardent free-trader or hope Trump takes a more “America First” approach to our trade agreements in 2019, it’s important to know that the consensus opinion on tariffs has changed dramatically over the course of American history. The back and forth debates over tariffs in this country are as old as the Republic itself. In fact, if it weren’t for tariffs, there probably wouldn’t be a United States of America. The Founding Fathers went to war because of “taxation without representation,” but much of the colonists’ frustrations also came from tariffs.
By Buck Sexton
American Consequences 29
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