No, tariffs don’t fuel growth
Subscribe to enjoy similar stories. Modern protectionists are desperate to find historical examples of tariffs promoting industrialization and economic growth. To this end, they increasingly argue that 19th-century America’s extraordinary economic success was fueled by high tariffs.
In an essay for the Economist, former U.S. Trade Representative Robert Lighthizer insists that “when America grew in the 19th century from a modest agricultural country into the world’s largest economy, tariffs were critical to its success." Oren Cass writes that “behind some of the world’s highest tariff barriers, the United States transformed from colonial backwater to continent-spanning industrial colossus." Michael Lind says the U.S. during the 19th century “pursued a successful import substitution strategy that transformed it from an agrarian to an industrial economy with the help of tariffs." It’s true that America had high tariffs throughout the 19th century and experienced substantial economic growth.
But tariffs were the nation’s primary revenue source until the ratification of the 16th Amendment—which authorized income taxes—in 1913. Alexander Hamilton, who supported industrial subsidies that Congress rejected, was skeptical of high tariffs since no tax revenue is collected on goods that tariffs keep out of the country and tariffs funded about 90% of the government. Not until 1816 was a tariff enacted with any serious protectionist intent, according to Dartmouth economist Douglas Irwin.
Protectionism peaked in 1828 with what came to be known as the Tariff of Abominations, which raised average tariff rates on all merchandise imports to an all-time high of 57.3%. During those years of rising tariff rates, U.S. industrial output grew
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