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

by Douglas A. Irwin

Having largely defeated the movement for protective tariffs, Democrats reestablished the idea of a “tariff for revenue only” as the guiding principle of trade policy. For example, in December 1854, Democratic President Franklin Pierce declared that a tariff for “revenue, and not protection, may now be regarded as the settled policy of the country.”45 Under this standard, import duties were to be imposed only to raise funds for economical government expenditures; any tariff rates above 20–30 percent were considered excessive, and any significant budget surplus called for a reduction in duties. Because import duties raised almost all of the government’s revenue, there was little scope for alternative commercial policies, such as reciprocity agreements with other countries. Indeed, Congress did not encourage the president to undertake negotiations that might lead to such agreements.46