Question

Discuss tariffs in the in the early years of the United States. Analyze their effects on industrialization and production (hint: depending on the products and the time period, their effects may be positive or negative or both) and their use as a revenue source?

Answer 1

protectionism was an American tradition according to paul bairoch thr united states was the homeland and bastion of modern protectionism sice the end of the 18th century and until after world war

the tariff act was the second bill of the republic signed by president George Washington allowing congress to imposs a fixed tariff of 5% on all imports with a few exceptions most American intellectuals were against the free trade advocated by classical economics like Adam Smith Rricardo and jean Baptiste say and were protecting their industries . alexander hamilition the first secretary of the treasury of the united states and Daniel Raymond were the first theorists to present the infant industry argument not the german economist friedrich list Hamilton feared that britains policy towords the colonies would condemn the unitied states to be only producers of agricultural products and raw materials Washington and Hamilton believed that political independence was predicated upon economic independence .increasing the domestic supply of manufactured goods particularly war materials was seen as an issue of national security hamiliton was the first to use the term infant industry argument to the forefront of economic thinking .in report on manufactures which is considered the first text to express modern protectionist theory he called for customes barriers to allow American industrial development and to help protect infant industries including bounties derived in part form those tariffs Hamilton explained that despite an intial increase of price caused by regulation that control foregin competition once a domestic manufacture has attained to perfection it invariably becomes cheaper

according to Michel lind protection was Americas de facto policy from the passage of the tariff of 1861 to world war 2 switching to free trade in 1945 it has been argued that one of the American revolution itself was a desire to industrialize and reverse the trade deficit withbritin whichg had grown by a factor of ten in the space of a decades

in 1812 all tariffs were increased to 25% due to the war there was a brief episode to free trade from 1846 but the panic of 1857 eventually led to higher tariff demands than president james buchanan signed in 1861

in the 19th century statesmen such as senator henry clay continued hamiltons themes within the whig party under the name the early 1860s Europe and the united states pursued completely different states policies. the 1860 were a period of growing protectionism in the united states while the European free trade average tariff rate on imports of manufactured goods was around 1875 from 40%to 50%in continental Europe at the hight of European liberalism. the annual growth states was 1.8% between 1850 and 1870 2.1% between 1890and 1910 the best 20 years of economic growth were therefore those between 1870 and 1890 the most orotectionist period

from 1871 to 1913 the average U.S tariff on dutiable imports never fell below 38% gross national product grew 4.3% annualy twice the pace in the free trade britain and well above the U.S international trade commission under president reagon