How a pro-tariff president impacted America’s economy more than 100 years ago
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IDAHO FALLS – As the nation entered the industrial age during a time of economic depression, William McKinley felt protective tariffs were the key to a bright financial future — and voters agreed with him.
It was Nov. 3, 1896, and the former Ohio Governor was on his way to becoming America’s 25th president. The 53-year-old Republican earned 51% of the popular vote against Democrat William Jennings Bryan, according to voting records.
McKinley was sworn in as commander in chief on March 4, 1897, and went on to win a second term four years later.
Since taking office in January, President Donald Trump has expressed admiration for McKinley multiple times. During his inaugural address, he called America’s former leader “a great president” after renaming Alaska’s highest mountain peak in his memory.
“President McKinley made our country very rich through tariffs and through talent — he was a natural businessman,” Trump said.
Like McKinley, Trump has positioned himself as a champion of American industry. His condemnation of “bad” trade deals and support for higher tariffs on the campaign trail earned him a second term in a landslide victory.
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Amid Trump’s plan to impose reciprocal tariffs against Canada and Mexico in the coming weeks, here’s a look at McKinley’s use of tariffs back then and its impact on the nation’s economy.
‘Napoleon of Protection’
The Tariff Act of 1890 is McKinley’s signature legislation. It’s a bill he sponsored as a member of the House of Representatives before he was elected president. The McKinley Tariff, as its now known, imposed a 50% tax on U.S. imports.
Historical records indicate McKinley had America’s best interests at heart with this legislation. His goal was to increase revenue for the federal government and protect American industry from foreign competition at the beginning of the industrial age.
The passage of the tariff earned McKinley the title “Napoleon of Protection.”
But, as CBS Sunday Morning reported earlier this month, the measure had mixed results.
“While it did spur growth in some protected industries like tinplate manufacturing, it also raised prices for consumers and sparked a political backlash (that hurt Republicans),” FreightWaves, a price reporting agency focused on the global freight market, reports.
In 1894, Democrats replaced the McKinley Tariff with the Wilson-Gorman Tariff. It slightly reduced the tariff amount and imposed a 2% income tax for earnings that surpassed $4,000 a year. The U.S. Supreme Court deemed it unconstitutional in 1895 and struck it down.
After McKinley was elected president, he signed the Dingley Act into law. It reinstated protective tariffs on some goods, raising rates to an average of 49%. The measure was introduced by Rep. Nelson Dingley Jr. — McKinley’s first choice for Secretary of the Treasury, which Dingley declined — and fulfilled a campaign promise. It remained in effect for 12 years, making it the longest-lasting tariff in U.S. history, according to historical records.
Changing course
Though McKinley built his reputation on protection tariffs, something happened the following year that changed his focus. A mysterious explosion of the U.S.S. Main in Cuba in August 1898 propelled America into war with Spain.
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The conflict, now known as the Spanish-American War, was resolved four months later and resulted in the U.S. acquiring Cuba, the Philippines and other territories in Latin America and the western Pacific, including Hawaii.
In the ensuing years amid tensions overseas, McKinley felt more open trade was necessary for improving relationships with other nations.
He said as much to a crowd in Buffalo, New York on Sept. 5, 1901. He was six months into his second term when he delivered what became his final speech.
“The expansion of our trade and commerce is the pressing problem,” McKinley told the crowd. “Reciprocity treaties are in harmony with the spirit of the times, measures of retaliation are not. If perchance some of our tariffs are no longer needed, for revenue or to encourage and protect our industries at home, why should they not be employed to extend and promote our markets abroad?”
The following day, as McKinley was shaking hands with the public, an assassin shot the president in the stomach. Doctors never found the bullet and he died from gangrene-related blood poisoning eight days later.
‘He was absolutely right about that’
More than a century since then, historians say McKinley’s legacy with protective tariffs is complex. While it did provide a short-term economic boost for American industry, it ultimately resulted in higher costs for consumers and retaliatory tariffs from foreign countries.
The country remains divided on Trump’s proposed tariffs and time will tell whether they’re beneficial or detrimental to the economy.
But when it comes to McKinley’s legacy with tariffs, biographer Robert Merry said in a recent interview that McKinley “was absolutely right about” changing course on protectionist policies during his second term.
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