U.S. vs. Europe: Historical Tariff Policies Compared

Protectionism vs. Free Trade: A 19th-Century Divergence

United States: High Tariffs as Industrial Policy

• 1789–1913: Tariffs = primary federal revenue (up to 90%) + industrial protection
• Key acts: Tariff of 1816, 1828 "Tariff of Abominations," Morrill Tariff (1861), McKinley (1890), Dingley (1897), Payne-Aldrich (1909)
• Average rates: 20–50% on dutiable goods; protected textiles, iron, steel, wool
• Goal: Foster infant industries, fund government, win political support (North/West)

Europe: Toward Lower Tariffs & Trade

• UK: Repealed Corn Laws (1846) → free trade pioneer; Cobden-Chevalier Treaty (1860) with France
• France, Germany, Low Countries: Gradual liberalization 1860s–1870s; bilateral treaties
• Late 1870s–1890s: "Great Depression" (price deflation) → tariff revival (Bismarck's 1879 tariff, Méline Tariff 1892)
• But generally: Lower averages than U.S.; more reliant on trade; smaller domestic markets

Consequences

• U.S.: Industrialization accelerated; consumer prices higher; sectional tensions (North vs. South)
• Europe: Deeper integration, specialization; vulnerability to U.S. dumping; later protectionist backlash

20th Century Convergence

Post-WWII: Both drove GATT/WTO liberalization. U.S. average tariff fell from ~20% (1930) to <2% (2000). EU common external tariff ~4–5%. Recent: targeted tariffs (steel, aluminum, China) under both Trump and Biden; EU retaliatory measures.

The historical gap has narrowed—but philosophical roots differ.