Clashing Over Commerce: A History of US Trade Policy (Markets and Governments in Economic History)

by Douglas A. Irwin

The Tariff of 1816 was the first “protectionist” tariff of the United States in the sense that it was mainly designed to provide assistance to domestic manufacturers facing foreign competition. Given Madison’s opposition to Hamilton’s Report on Manufactures in the 1790s, it is ironic that his administration helped institutionalize government support for manufacturing by imposing high duties on imports.12 However, the federal government never had a conscious policy of starting “infant industries.” Rather, those industries emerged as a by-product of the trade interruptions and then pressured Congress to protect them from foreign competition. The direction of causality is important: Congress did not deliberately create the infant industries through policy measures; the industries emerged and then compelled Congress to enact higher tariffs for their benefit. In other words, Congress was not farsighted in shaping the future path of the economy but simply reacted to the political pressures that it faced.