Until the end of World War 2 the United States actively protected domestic industry through tariffs in addition to a series of policies collectively known as the American School of Economics, which can be traced back to policies initiated by Alexander Hamilton.
The simple reason for the switch was that prior to the end of the war, the economy United States was still relatively small - albeit growing. Protecting emerging industries from larger, more powerful competitors was politically necessary. After the war - thanks to the needs of war production coupled with the destruction of its economic competitors - the United States was the world's dominant economy and did not have to worry about foreign competition. It was in a better position to turn the tables and dominate those economies that it has previously feared. It was also in a better position to establish and dominate international trading organizations in order to ensure that the rules it established would benefit domestic industry.
That said, it is still commonly pointed out that the United States still protects domestic industry, often due to the political pressures that those industries can place on elected officeholders. Economic policy is not set by economists immune from public pressure, but by politicians subject to removal from office in each and every election.
- 25 American Products That Rely On Huge Protective Tariffs To Survive.
For background:
- Economic Nationalism.
- American School.
- American System.
- Tariffs in United States history.
Some historical milestones - I'll add some commentary later:
Protectionist Period:
1789 - Tariffs of 1789.
1791 - Alexander Hamilton's Report on Manufactures.
1812 - War of 1812.
1816 - Tariff of 1816.
1828 - The Tariff of Abominations:
1842 - Tariff of 1842.
1844 - James Polk elected on a platform that opposed high tariffs.
1860 - Republican Party platform includes support for high tariffs.
1861 - The Morrill Tariff.
1905 - Taft-Katsura Agreement.
1913 - the Underwood Tariff - AKA - Revenue Act of 1913. The establishment of the income tax reduced the need for tariffs.
1922 - Fordney–McCumber Tariff.
1930 - The Smoot-Hawley Tariff.
1934 - Reciprocal Tariff Act.
Free Trade Period:
1944 - The Bretton Woods Conference.
1944 - World Bank.
1944 - International Monetary Fund.
1948 - General Agreement on Tariffs and Trade.
1986 to 1994 - Uruguay Round.
1994 - Marrakesh Agreement.
1994: North American Free Trade Agreement.
1995: World Trade Organization.
The Department of Commerce has a list of all the free trade agreements the United States has. It states that there are 14 in force with 20 countries.
- Click here for them.
