Since its inception, tariffs have represented one of the pillar strategies of US economic sustainability, which direct industrial production and global foreign relations. Historically, tariffs in the US economy accomplished far different functions from those of present-day protectionist measures and economic bargaining tools. The sales tax attorney in San Diego or at other places can help businesses deal with the new sales tax.
The article examines how US trade policies have changed due to tariffs and how they influence present-day international marketplace movements.
-
The Start of American Tariff Policy (Late 18th – Early 19th Century)
When the United States came into existence, tariffs fulfilled dual purposes because they served both as trade policies and as vital financial sources for government operations before Congress implemented federal income tax. The Tariff Act of 1789 functioned as one of the first laws that protected new American industries and served as a primary source of revenue for the federal government.
-
Use of Tariffs as Political Weapons (19th Century)
Political strife intensified regarding tariffs during all years of the nineteenth Century. When the Tariff of Abominations (1828) came into effect it created intense conflicts between Northern states with protected factories versus Southern farming states dependent on imports.
Economic problems deepened political divisions between North versus South states until the ideological conflicts reached boiling point and triggered the Civil War. High retaliatory taxes gained support from Northern states for strengthening home-based manufacturing interests, but Southern states saw them as excessive barriers to trade.
-
Era of Protectionism (Early 20th Century)
After the Civil War ended, the United States adopted very aggressive protective measures in its trade policies. American industrial mega-corporations received protection from external competition through the extremely high trade barriers imposed by the McKinley Tariff (1890) and the Dingley Tariff (1897).
The protectionist tariffs enabled the US to experience quick industrial expansion, which established the nation as a world-leading manufacturer. The protectionist regulations received backlash from economists and trading partners because they constrained market competition along with preventing innovative business approaches.
-
A Shift Towards Liberalization (Later 20th Century)
After World War II, the United States granted trade liberalization while it moved away from protectionist policies. Global organizations GATT and WTO emerged in 1947 and 1995 as separate entities that established multilateral trade cooperation through lower tariff policies. The LA tax attorney or some other law firm can work with the business in this economy.
The domestic policy evolved through the Trade Act of 1974 by giving the President wider discretion in negotiating trade agreements as executive-led trade diplomacy emerged as the leading approach. NAFTA (1994) brought historic change through its removal of most tariffs that stood between the U.S., Canada and Mexico.
-
Return of Tariffs as Economic Nationalism (Early 21st Century)
Under the Trump administration, the implementation of tariffs has become the main focus of US trade policy during this recent period. The introduction of Section 232 steel and aluminum tariffs, together with Section 301 China tariffs, emerged as part of an administration strategy to defend supposed national security vulnerabilities and combat alleged trade imbalances.
These changes combated the previous decades of free trade. The advocates who endorsed this trade barrier system showed support for its protective impact on US industries and its ability to correct trade imbalances, yet detractors voiced concerns about increased market costs and supply disruptions, and damaged international relations.
SMO: Tariffs that work as a trade barrier, which protect the home country and tax the items that are coming from other nations. Learn how the US has navigated with the introduction and removal of tariffs throughout its history.
