Three Historical Tariffs That Americans Really, Really Hated
With the aggressive tariffs being dealt out to what were pretty friendly trade partners, a lot of people are having the same reaction: googling “tariffs good or bad?”
The answer to that question isn’t something that’s going to be resolved on an entertainment website. One thing that is undeniable about tariffs, however, is that they aren’t something that would be described as “a light touch.”
If you’ve got zero knowledge of how tariffs work, an overly basic breakdown is that they're an additional percentage other countries will owe when buying U.S. goods. A 20-percent tariff on Canada means that if Canada wants to import $100 of U.S. goods, they’d have to pay $120 to do so. Where the math gets a lot less simple is that tariffs are almost always met with retaliatory tariffs, so Canada will say, “Well, then you’re paying an extra 20 percent on our stuff too, asshole.”
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There’s also the question of who actually pays that extra $20. Maybe it’s Canada, but sometimes it’s the manufacturer that absorbs some of them, in order to get Canada to, you know, actually buy their stuff.
Being that companies don’t often love to just take financial hits, this price difference is often passed on to the final consumer, meaning those of us toiling down in the fields are essentially subsidizing the government, but importantly, not with “taxes” because that’s a bad word. Used illiberally, they can spike the prices of goods and cause inflation, which royally pisses people off.
Here are three times from history that happened…
Tariff of Abominations
You might be able to tell by the name that this one didn’t go great. It’s like when an concert is later referred to as “NAME OF VENUE Disaster,” probably wasn’t a great show. It also doesn’t help when one of the first sentences about it refers to it as “triggering a crisis.” The biggest issue with it was that it placed massive tariffs on trade with Great Britain, which caused retaliatory tariffs from Great Britain.
Pretty much any time tariffs are mentioned ever, you can assume that they end up going both ways. What made people, particularly in the South, so mad? They relied on import-exports with Britain, especially with regards to the cotton industry, much more than the northern states. So the old-school version of coastal elites didn’t get hit nearly as hard by the tariffs, resulting in what felt like a targeted tax on the South.
McKinley Tariff
You may have heard McKinley’s name tossed around by Trump himself in reference to his tariff plans. McKinley was a big-time tariff guy, as you can imagine someone earning a signature tariff to be. Tariffs were already higher in general during his time in office in the late 1800s, but McKinley pushed them to almost 50 percent in some cases, as part of a 1890 tariff package that now bears his name.
This probably looked good to Trump, because of two main things: 1) the economy did very well during that time; and 2) because he has absolutely zero interest in looking into things like “why.” People with more know-how than me basically say that the tariffs weren’t a big contributor to the country’s generally good economic standing. More notably, the actual population hated them. Because — say it with me — they caused increased prices and inflation among the general public.
Smoot-Hawley Tariffs
Again, bad signs off the bat for the Smoot-Hawley tariffs. Not by name alone, but by date. These tariffs were enacted in the year 1930. If you’re looking for economic policy to champion, you’d be best to avoid that little stretch known as “The Great Depression.”
Unsurprisingly, the Smoot-Hawley tariffs aren’t remembered fondly, and get labeled things like “A Classic Economics Horror Story.” The country, at the time, wasn’t fully in the Great Depression, and Congress decided it was a great time to give tariffs another run — a thorough one, too, that included tariffs on 800 different sectors. Economists disagreed, because they warned of retaliatory tariffs and a spike in the price of goods when materials became more expensive. Unfortunately, economists don’t vote in Congress, and the tariffs passed.
How did it go? Well, you look at pictures of some Americans in the early 1930s and tell me how happy they seem. At least we learned from this, right? RIGHT?