Written by: John Abbot
Tariffs. You have likely heard this term tossed around more than a tennis ball during Wimbledon over the last several months. Whether it be on TV, social media, or a conversation at a coffee shop, tariffs are the hottest topic in the Economic world right now. Tariffs are taxes that a government places on imported or exported goods. Since April 9th, tariffs have been enacted on $4 trillion worth of goods imported annually to the United States. Notably among Trump’s tariffs is a baseline tariff of 10% on imports from all countries, a tariff on China of 145%, and a 25% tariff on imported cars. Trump has threatened numerous other tariffs, but he announced last week that country-specific tariffs are on hold for 90 days(Treisman, R. 2025). These changes give us an opportunity to look at the history of tariffs in the U.S. and use this history to inform how we view both new and potential new tariffs. The history of tariffs in the U.S. can be viewed within three distinctive eras in the U.S., the Revenue Era, the Protection Era, and the Free Trade Era, with some saying that we may be entering a new era under Trump’s tariff impositions.
The Revenue Era, from 1790 to1860, saw the implementation of the Tariff Act of 1789, which put a 50 cent tax per ton on goods imported by foreign countries(Wikipedia contributors. (n.d.)). These tariffs were implemented to raise government revenue and contributed around 90% of funding for the government in this era. These policies were essential in growing the government as well as not becoming too dependent on other countries like Britain.
In the Protection Era from 1861 to1933, William McKinley passed the Tariff Act of 1890, making imported goods pay an average tax of 50% of their value, with the goal of protecting domestic industries (McKinley Tariff). By putting a substantial tariff on imports, McKinley aimed to drive up the price of imported goods, so Americans would be forced to purchase American goods and boost domestic production.Yet,several issues followed in the wake of this tariff, including price increases for consumers, retaliatory tariffs put on U.S. exports, and an increase in production costs for small businesses.
The McKinley Tariff was one of the highest tariffs in U.S. history at the time. It has since proved instrumental in helping us better understand and assess the impact of today’s tariffs on trade. The McKinley tariff was seen as a way to protect the U.S. from falling behind, as both production and technological advancement were increasing across the globe. The U.S. wanted to maintain its own production while ensuring its economic independence from other countries(Wikipedia contributors. (n.d.)). A similar motivation could be applied to the United States’ actions today as advancements are made in areas such as renewable energy, computer chips, AI, and medical supplies, and Trump wants to make sure that America is growing and innovating enough to compete against other countries. This then poses the question: are tariffs the right way for the U.S. to do this? McKinley’s tariffs made America self-sufficient in tinplate, but the prices were above global prices and we became sufficient at the expense of consumers and downstream industries(Bryan, K. 2023).
The alternative to Tariffs is a system of total free trade. After WWII, the U.S. saw a huge increase in production. This, combined with improvements in transportation, saw the American outlook shift from tariffs to free trade. During this era, legislation like the General Agreement on Tariffs and Trade (GATT) was passed, which was a legal agreement between many countries to promote international trade by eliminating trade barriers like tariffs(Wikipedia contributors. (n.d.). According to Dartmouth economic historian Douglas Irwin, “The prosperity of the world economy over the past half century owes a great deal to the growth of world trade…GATT conferees helped put the world economy on a sound foundation and thereby improved the livelihood of hundreds of millions of people around the world”(Ayala, L. 2025). While many agree with Prof. Irwin, there are also many opponents of free trade. They would argue that powerful countries often control the terms of free trade and could later leverage those terms at the expense of weaker r countries. Additionally, they might say that free trade can hurt workers by making them work unfair hours for unfair pay in hopes of achieving the cheapest possible production, which also increases unemployment in other countries(Renata, M. 2011).
It truly, like many other decisions, comes down to weighing the pros and cons of tariffs. In order to do this, we can look at historical parallels to decide if the level of tariffs being implemented by Trump are what’s best for America. Proponents of tariffs would emphasize the importance of the U.S. staying competitive in global markets, especially as technology and production efficiencies come into play. Americans would love to see an increase in employment, but can we be certain that tariffs are the best way to do that? Are Americans and businesses okay with paying increased prices to hopefully see an increase in America’s production? Maybe the fact that tariffs can be used as bargaining tools in politics make the pro side of tariffs outway the cons. A lot of deduction needs to be done, and personal motivations make one person weigh the sides differently.
References
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Swanson, A. (2025, February 6). Trump’s tariffs: The full list of products from Canada, Mexico, and China. The Wall Street Journal. https://www.wsj.com/economy/trade/trump-tariffs-list-products-canada-mexico-china-b41351df?mod=Searchresults_pos2&page=1
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Treisman, R. (2025, April 10). Where tariffs stand after Trump’s partial pause. NPR. https://www.npr.org/2025/04/10/nx-s1-5358929/trump-tariff-pause-china
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Smith, R. P. (2018, April 12). A history of America’s ever-shifting stance on tariffs. Smithsonian Magazine. https://www.smithsonianmag.com/smithsonian-institution/history-american-shifting-position-tariffs-180968775/
Bryan, K. (2023). Revisiting the McKinley Tariff of 1890 through the lens of modern trade theory [PDF]. Kevin Bryan Economics. https://kevinbryanecon.com/o3McKinley.pdf
Renata, M. (2011). Free trade: Pros and cons. KAFU Academic Journal, 2. https://www.kafu-academic-journal.info/journal/2/40/Ayala, L. (2025, April 7). Economics professor and U.S. trade expert Doug Irwin critiques Trump administration’s tariffs. The Dartmouth. https://www.thedartmouth.com/article/2025/04/economics-professor-and-u-s-trade-expert-doug-irwin-critiques-trump-administrations-tariffs