Even Donald Trump’s Historical Role Model Had Second Thoughts About Tariffs

The other morning, as Donald Trump was writing on social media that the “Entire World is RIPPING US OFF!!!” and threatening to impose tariffs of two hundred per cent on wine and champagne from the European Union, and as investors were fretting about the possibility of his actions plunging the economy into a recession, I happened to be reading a biography of another tariff-raising Republican whom Trump has adopted as a role model: the Ohioan William McKinley, who served as President from March, 1897, until his assassination, in September, 1901, at the hands of an anarchist. Last year, Trump said that McKinley “made this country rich.” On Trump’s first day back in office, in January, he reinstated Mt. McKinley as the name of an Alaskan mountain that is the highest peak in North America.

In “President McKinley: Architect of the American Century,” which was published in 2017, the journalist and author Robert W. Merry recounts how McKinley started out as a “steadfast protectionist” who believed that high tariff walls were a prerequisite for the rapid growth of the U.S. economy in the decades following the Civil War. In 1890, when McKinley was serving as the chairman of the House Ways and Means Committee, he sponsored a tariff bill that raised the duties on many imported goods to nearly fifty per cent on average. Sounding like a modern-day Trumpian economic nationalist, he declared on the House floor, “This bill is an American bill. It is made for the American people and American interests.” Seven years later, when McKinley was in the Oval Office, he signed into law a piece of legislation, the Dingley Act, that raised some tariffs even further.

McKinley also presided over the Spanish-American War of 1898, and the subsequent acquisitions of Hawaii, the Philippines, Puerto Rico, and Guam as U.S. territories. It’s hardly surprising that Trump, a self-proclaimed “tariff man” and a would-be American imperialist, seized on McKinley as a role model. But a closer inspection of McKinley’s trade policy reveals some surprises and warnings for Trump-supporting members of Congress who are up for reëlection in less than twenty months. In purloining a simplistic version of McKinley’s attitudes toward tariffs, Trump is ignoring the valuable lessons they have to offer.

Since the days of Alexander Hamilton, the United States had imposed customs on imported goods to encourage local production and raise revenues. Throughout the nineteenth century, the dividing line on trade policy was largely geographic. In the South, planters and other agricultural interests who exported crops to world markets were generally supportive of open trade and low tariff rates. In the North, where new manufacturing industries faced stiff competition from European (and particularly British) imports, many business interests supported higher tariffs.

By the time McKinley entered Congress, in 1877, industrialization was accelerating rapidly, and his home state, long dependent on agriculture, was emerging as a major center for the mining of coal and the production of iron and steel. McKinley was the son of an iron-foundry owner, and his electoral district encompassed some of Ohio’s biggest industrial centers. In the long run, industrialization and migration would transform American politics, but for now the Republican Party remained the primary representative of Northern industrialists, and the Democratic Party largely depended on the South.

After arriving on Capitol Hill, McKinley advocated for higher tariffs. Back then, Congress determined trade policy: it wouldn’t be until the nineteen-thirties that it delegated the responsibility for making trade deals and adjusting tariff rates to the President. The postwar government was still fiercely divided, and McKinley didn’t get the opportunity to pass any trade legislation until after the election of 1888, when Republicans won control of the White House and both chambers of Congress.

Thus empowered, McKinley drew up a bill that raised or maintained import duties on a broad range of manufactured goods, including woollens, cottons, earthenware, iron, steel, and metal products. Democrats claimed that the McKinley Tariff Act, as it came to be known, would gouge ordinary Americans and provoke foreign countries to retaliate. They portrayed McKinley as a captive of his wealthy industrialist allies, who included Mark Hanna, the Cleveland iron-and-steel magnate. The Republicans largely dismissed these objections, and, on October 1, 1890, President Benjamin Harrison signed the tariff bill into law. The midterms were just a month away.

“The Democrats had supporters of the tariff on the defensive,” the historian Richard J. Jensen wrote in his book “The Winning of the Midwest: Social and Political Conflict, 1888-96.” “Young party workers peddled wagonloads of tinware from house to house, asking fifty cents for twenty-five-cent items, and explained to dismayed housewives that McKinley’s tariffs had doubled the price of tin.” Rallying to McKinley’s side, other Republican leaders insisted that the tariffs bearing his name would protect workers’ jobs. Harrison and his Secretary of State, James G. Blaine, visited McKinley’s district and gave campaign speeches, but their efforts were to no avail. On Election Night, the Republicans suffered heavy losses across the country. McKinley was one of the victims.

To be sure, other factors played into this outcome. In the case of McKinley, redistricting changes had boosted the number of Democrats in his district. At the time, however, it was generally believed that public anger at the new tariffs was a major reason for the G.O.P. wipeout. In his sweeping 2017 history of U.S. trade policy, “Clashing Over Commerce,” the Dartmouth economist Douglas A. Irwin points out that Theodore Roosevelt, who was then an ambitious young Republican politician, subscribed to this view. When, in 1901, Roosevelt succeeded McKinley as President, he would follow his predecessor’s lead on U.S. imperialism, but he would also steer away from tariffs.

Irwin’s book also highlights another fact about the McKinley Tariff Act that should worry latter-day protectionists in the Trump Administration. In the years after the law was enacted, the U.S. economy entered a deep slump, which didn’t fully relent until 1897. Non-trade factors played the primary role in bringing about this calamity, particularly a big financial panic in 1893, which led to the collapse of a number of banks and railroads. Still, as Irwin noted when I called him up last week: “When President Trump says that the McKinley tariff ushered in this glorious period of industrial expansion, it was actually a recession, really a depression, for a number of years.”

A third important fact about McKinley’s record that Trump ignores is that his views on trade were far from static. When he ran successfully for President, in 1896, he was still a supporter of high tariffs—his Democratic opponent, William Jennings Bryan, had called for less restrictive policies—but his views were changing, an evolution that the economic slump seems to have accelerated. McKinley “could see that America’s burgeoning industrialism was outstripping American consumer demand, and prosperity in the postdepression era that would define his presidency would require an active American pursuit of foreign markets,” Merry writes in his biography.

In his March, 1897, Inaugural Address, McKinley highlighted the “reciprocity principle,” which he said involved “the opening up of new markets for the products of our country, by granting concessions to the products of other lands,” by which he meant reducing or removing the barriers to imports. Four months later, he signed legislation that appeared to contradict this principle: the Dingley Act raised the average rate on dutiable goods to as high as fifty-two per cent for a time. But the most egregious elements of this legislation came about because of uber-protectionists in the Senate. Merry writes that, in fact, McKinley “harbored some disappointment at many of the law’s high duties,” and took consolation from the fact that the bill also bestowed upon him some limited power to reach reciprocal trade agreements with foreign countries. The following year, the White House announced a deal with France in which the French duties on American exports of a range of goods, including fruits, pork, and building materials, would be set at a minimum rate in return for a reduction of U.S. tariffs on French goods, including wines, spirits, and paintings.

This agreement, and others like it, didn’t do very much to mitigate the high tariffs imposed by the McKinley and Dingley Acts. But McKinley, as he entered his second term, in 1901, seemed sincere in his belief that new circumstances demanded new, less restrictive trade policies. Speaking in Buffalo on September 5th, the day before he was fatally shot, he acknowledged some of the benefits that the U.S. economy derived from trade, saying, “A system which provides a mutual exchange of commodities, a mutual exchange, is manifestly essential to the continued and healthful growth of our export trade. We must not repose in fancied security that we can forever sell everything and buy little or nothing. . . . We should take from our customers such of their products as we can use.” Further distancing himself from the harsh protectionist language he had employed earlier in his political career, he went on, “Commercial wars are unprofitable. A policy of good will and friendly trade relations will prevent reprisals. Reciprocity treaties are in harmony with the spirit of the times, measures of retaliation are not.”

Trump claims to be in favor of reciprocity. The White House is already describing an extensive proposal of new levies, which he is expected to impose in early April, as “reciprocal tariffs.” But Trump’s definition of reciprocity is a peculiar one. “Under the U.S.-Mexico-Canada Agreement, we already have reciprocity with Canada and Mexico,” Irwin pointed out to me. “Trump cut that deal in his first term, and he seems to be walking away from it. Japan doesn’t have a tariff on imported automobiles. Should we match that? He seems to want to raise tariffs rather than lower them.”