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

by Douglas A. Irwin

The Report on Manufactures would influence the public debate over trade policy and government’s role in promoting manufactures for many decades to come. The report was frequently cited to justify high tariffs to protect domestic manufacturers from foreign competition. Yet Hamilton was much less of an advocate of “protectionism” than he was later made out to be.49 Because revenue considerations were absolutely paramount to him, Hamilton preferred modest duties on imports, not excessively high duties. Moderate duties would keep imports flowing into the country, providing the essential tax base that would produce a reliable stream of revenue to fund government expenditures and establish the public credit. “Experience has shown that moderate duties are more productive [of revenue] than high ones,” Hamilton observed in 1782.