America’s Tariff Men: Connecting McKinley to Trump
Posted December 6, 2018 6:27 p.m. EST
His political fortunes rose with a protectionist promise. And then after he muscled his agenda through Congress, his party paid a price in the next election.
William McKinley is America’s original “Tariff Man” — in fact, during his 1896 presidential bid, he became known for saying, “I am a tariff man standing on a tariff platform.” President Donald Trump has been quick to cite the former president’s views on tariffs while he wages his trade war.
“Free trade gives to the foreign producer equal privileges with us,” McKinley, a Republican, said in an 1892 speech in Ohio. “It invites the product of his cheaper labor to this market to destroy the domestic product representing the higher and better-paid labor of ours. It destroys our factories or reduces our labor to the level of theirs.”
Trump uses blunter language. In calling the Trans-Pacific Partnership a “rape of our country,” he made clear that he, too, opposed free trade.
McKinley favored high tariffs on goods like steel, iron, glass, wool, sugar and beans as a way to protect and expand U.S. industry. It was a divisive issue split largely along party lines — although in McKinley’s day, Republicans generally represented manufacturers in the North and Midwest while the agriculturally focused South was a Democratic stronghold.
History may not be repeating itself exactly, but there are distinct echoes of the late 19th century early into the 21st. An examination of how McKinley’s policies evolved can offer some insight into our own political climate.
Tariffs on exports were the central issue in the presidential election, and Grover Cleveland, a Democrat promising to lower barriers to free trade, won the popular vote. But Benjamin Harrison, a Republican and staunch protectionist, prevailed in the Electoral College.
This set the stage for already-high tariffs to surge even higher. Members of Congress treated the election result as a referendum on tariff reform. McKinley, then a congressman from Ohio, was poised to act.
According to Robert Merry, author of “President McKinley: Architect of the American Century,” McKinley wanted to leave his mark on politics and was advised that the best way to do so was to focus intensely on one issue.
He decided to toe what was then the Republican line: unwavering support for high tariffs. After the election of 1888, McKinley became chairman of the House Ways and Means Committee, where he worked to codify his pro-tariff philosophy in law.
A year and a half after gaining the chairmanship, McKinley pushed through the Tariff Act of 1890, known as the McKinley Tariff, covering more than 1,500 goods.
Although it did bolster some manufacturers, his success in enacting big new tariffs spelled doom for his party.
The country was just as divided about tariffs in 1890 as it had been two years before. Even different sides of the same industries took opposing views.
“If you were a sheep herder, you wanted tariffs” on wool imports, said Douglas Irwin, an economics professor at Dartmouth College and author of a number of books that examine historical U.S. trade policies, but “if you were a manufacturer, you wanted cheap wool.”
“This divide between intermediate goods producers and final goods producers, we saw that back then and we see that today,” he added.
That divide drove the Republicans out of the House majority in the 1890 midterm election.
The tariff bill “proved to be a political disaster,” Merry said. (Although the ousted McKinley saw things differently.)
While the new laws were unpopular enough to unseat incumbents, Merry said, they contained a seed of McKinley’s tariff evolution. As the United States was beginning to export more goods, he was becoming a believer in trade reciprocity.
“Reciprocity was the idea that we believe in high tariffs, but we also see that America is becoming this machine of productivity, both farm goods and industrial goods,” Merry said. “He came around because he began to see the merit and the need in America becoming a trading nation.”
By the time he was sworn in as president in 1897, after a turn as governor of Ohio, McKinley’s trade views were starting to shift, and they were reflected in another trade law that year.
“There was a reciprocity element to the 1890 bill, but it never got much attention and he insisted it be in the 1897 bill,” Merry said. McKinley was becoming an advocate of lowering trade barriers through reciprocal agreements. Both the 1890 and 1897 bills imposed high tariffs, but Merry said the later version left more room to negotiate more favorable terms with other countries.
“It had mixed success, but McKinley became very devoted to the idea,” Merry said. “In Buffalo, New York, the same visit where he was assassinated, his one major speech at the Pan-American Exposition was to tout the idea of trade, of reducing tariffs, to do it through reciprocity and fostering America as a trading nation.”
In that final speech, McKinley revealed how starkly his views had changed.
“Commercial wars are unprofitable,” he said. “A policy of goodwill and friendly trade relations will prevent reprisals.”
“I think the key to understanding this is understanding Bob Lighthizer,” Merry said, referring to Robert Lighthizer, the U.S. trade representative. “Lighthizer has crafted this view, and Trump has apparently had this view going back years, that we need to develop a kind of reciprocity,” which goes right back to McKinley.
But Merry pointed out that despite the parallels — a Republican who won the presidency (despite losing the popular vote) on a platform of protectionist trade policy and then a midterm election, seen partly as a referendum on the incumbent Republicans, that returned some power to the Democrats — there was a key difference between the eras.
The 1890s were a time when tariffs were already generally high, so reciprocity meant lower prices for everyone. That’s not the case now.
“It’s a huge gamble, because China is a rising power,” Merry said. “If you look at China today, it’s very much like America in the 1890s or 1900s or 1910s, and they don’t want to be beat around.”
Trump may admire McKinley’s early tariff philosophy, but Merry said the president should also look to its evolution.
“McKinley would say tariffs protected the American worker, and that made it possible for us to grow and thrive and have prosperity, but ultimately he abandoned that point of view,” he said.