This weekend I was able to listen to a Cato Institute podcast featuring Douglas A. Irwin’s new book Clashing over Commerce. The book highlights the politics undergirding the history of international trade protectionism in the United States. I found Irwin’s discussion with interviewer Caleb Brown to be helpful and to shed a little light on today’s discussion on the current administration’s move toward protectionism. Below I have tried to summarize some of Irwin’s arguments – occasionally extending and adding content. Any inaccuracies and mistakes are my own.

In its early years, the United States depended upon importing manufactures. Tariffs were used to raise revenue, not to protect fledgling United States’ industries. This is true with many young governments that do not have the institutional infrastructure to collect taxes. Goods are relatively easy to tax. Ports are accessible and make for easy tax collection points. There is always a balancing act between having the tariffs so high that they discourage imports, while raising sufficient revenue to finance the government. The Tariff Bill of 1816 is the first legislation designed to protect a US industry. The bill was supported by Kentucky congressman Henry Clay and placed a 25% duty on cotton and woolen imports.

In the 1820s in Massachusetts, the cotton textile industry was growing. In the late 1820s, Massachusetts’ senator Daniel Webster began to ask for tariffs to protect the textile industry. Manufacturers in the northern states wanted protection for their products. Henry Clay pushed for protectionism in United States Senate. Clay essentially wanted nationalized industry and managed trade –  part of his “American System”. Clay was opposed by export interests in the South. The north wanted managed, protected trade and the south wanted freer trade.

After the Civil War, manufacturing interests in the North were facing global competition and the nation was in need of war financing. Beginning in the antebellum period, tariffs were ratcheted up and stayed very high through the 1930s.

The league of Nations World Economic Conference met at Geneva in 1927 and counseled the elimination of tariffs in a movement in the direction of free or trade. The United States chose a more economic nationalist approach. Historically, the Republican party was the party of high tariffs. Manufacturing industries were in the North, the political base of the Republican Party. In 1929, Reed Smoot, Republican Senator from Utah and Willis Hawley, a Republican Representative from Oregon introduced legislation for increasing US tariffs into the House and Senate. This was normal Republican fair for the time. Initial legislation was aimed at aiding farmers that were hurt during the 1920s, but the legislation grew to included higher tariffs on manufacturers as well. There was extensive log rolling. There were literally debates and roll call votes on over 1000 individual tariffs. After Smoot-Hawley, in 1934, responsibility for tariffs was passed to the executive branch. Before the legislation was passed, the United States had slipped into a recession and our trading partners retaliated with protection of their own helping to push world into the Great Depression.

After World War II the US State Department took the lead on negotiating tariff reductions. Cordell Hull, an old southern democrat and free trader, led the charge to move the world in the direction of a free-trade Global economy. The multilateral trading system that we have today emerged in the late 1940s. The General agreement on Tariffs and Trade (GATT) provided the institutional framework for post-World War II trade. Tariff levels were reduced from pre-World War II highs to today’s relatively low levels through several rounds of negotiations. From the 1940s through the 1960s there was a rough bipartisan agreement in the United States that we should move in the direction of free-trade.

In the 1970s and 1980s Democrats began moving in the direction a protectionism while Republicans moved more in the direction of free-trade. According to Irwin, this occurred because the parties began to represent different sections of the country. In the 19^th century and early 20^th century Republicans were mainly a party of the North, now they have moved to the South and the West. The Democrats, were representing the South, now have moved to representing cities and the upper Midwest. So the parties flipped their position on trade policy. The Democratic parties’ connection with unions has affected their perspective on trade.

Will the economic nationalism of the Trump Administration bear fruit with a return of Republicans to their anti-trade position?