Though there is a Phase One trade agreement with China, most of our newer import taxes are still in place. The centrality or prevalence of protectionism to the Republican Party’s platform is revived after declining through past decades. In fact the tariff could be known as the signature issue of President William McKinley, who served prior to the 16th Amendment, which affirmed the constitutionality of an income tax.

Per President McKinley, Architect of the American Century, President Rutherford Hayes advised the former brevet major (promoted by President Lincoln, though not mentioned in the book) in 1877,

“To achieve success, you must not make a speech on every motion offered or every bill introduced. You must confine yourself to one thing in particular. Become a specialist. Why not choose the tariff?” 

McKinley followed the advice of Hayes. He sought to protect his constituent industries, then his state’s. Unique tariff legislation with then Representative McKinley’s name passed in 1890, but an Act signed by President Grover Cleveland in 1894 lowered rates.

In his book, Robert W. Merry recounts the 1897 Dingley tariff, under President McKinley, and restates some of its objectives, such as industrial independence. He does not emphasize it in consideration of an economy that not only recovered, but prospered from a depressed state. Only an attentive reader would piece together that there was a $70 million budget deficit, at the time of McKinley’s election, that converted into an $80 million surplus forecast for his second term in 1901.

The economy had declined in 1893, amid issues such as a drought that affected agriculture and questions about the gold value of money. The situation in 1895 was a crisis, and Cleveland needed a deal with J.P. Morgan to save the US gold reserves. McKinley won the presidency in 1896, when the depression had not concluded, and Dingley’s act was his priority (subsequent were the Spanish American War and annexation of Hawaii).

A concurrent resurgence in business confidence may not be attributable to treatment of imports and exports. It coincided. On pages 167-8, Merry describes “a new economic certainty born of McKinley’s settled views on protectionism and sound currency.” He goes on to report that “Business confidence also swelled” on commitment to responsible bimetallism, or what was then looser monetary policy favored by western farmers, Democrats and Populists.

McKinley, who Merry says could shake 50 hands a minute, won re-election in 1900. Vice President Theodore Roosevelt gained the Republican Party’s nomination. After an anarchist shot the president, he died singing his favorite hymn, Nearer, My God, to Thee. Roosevelt succeeded. During his time in office, from 1901 until 1909, the tariff stayed in place. (McKinley’s former commissioner to the Philippines, William Howard Taft, immediately changed the rates as president in 1909 and then proposed what would be the 16th Amendment.)

Roosevelt now overshadow his valorous boss, as discussed by Merry in his Epilogue. Yet, it is 2020 and President Trump campaigned on tariffs since before 2016, with retaliation foreseeable. Merry has no overt message in his 2017 book. International trade is ultimately tangential to his support of McKinley. The 480 pages partly read as an opportunity to argue for the present-day worth of newspapers to recount McKinley’s time. 

Some 120 years later, the National Federation of Independent Businesses has a Small Business Optimism Index. From a reading of 104.8 in April of 2018, records show it reached what was then an all-time high in May, set a new high in August, and remained elevated through October. Would it be responsible to claim that the implementation of tariffs caused confidence in commerce? It coincided.


There is also a decline in confidence during January – March, 2019 (coincident with a government shutdown).

A graphic of data follows. It does not include effects of the contagious coronavirus. Business confidence is considered a leading indicator. It is reasonable to suspect that the future release of data will portend problems even further ahead.

Pertaining to companies, it is not as easy for them to raise funds by issuing shares as the corporations’
stocks no longer fetch the same bids (one reason a market crash is connected with recession; as in the 1890s). There are simultaneous issues involving debt, as US treasuries are being bought amid the chaos, so that some key borrowing costs are still lower than previously. However, as oil and natural gas prices collapse, indebted exploration and production companies must be on the brink of bankruptcy; evidently along with Boeing and maybe airlines and hotels.

There is a worry about illness. Business confidence is set to collapse along with other economic data. There should still be possibilities and prospects. There are differences in comparison to the 1890s, even if someone, other than Merry, contends that tariffs can be associated with employment.