The Tariffs Debate

“There is no better teacher than history in determining the future. There are answers worth billions of dollars in a $30 history book.”
— Charlie Munger

I’m not sure how much the state of Illinois paid for the history book my son is using in high school, but I found a copy for $6.79 on the Thrift Books website—definitely within the $30 range that Charlie Munger, the late Vice Chairman of Berkshire Hathaway, was referring to. Munger passed away in 2023, and his quote originally appeared in his book Poor Charlie’s Almanack in 2005, but it remains as relevant as ever.

Tariffs—now that’s a hot topic these days. Here’s what my son learned a few weeks ago about tariffs during the Gilded Age and in the late 1920s:

“Another major economic issue concerned tariffs. Many Democrats thought that Congress should cut tariffs because these taxes had the effect of raising the price of manufactured goods. Although it may have made sense to protect weak domestic manufacturing after the Civil War, many questioned the need to maintain high tariffs in the 1880s, when large American companies were fully capable of competing internationally. High tariffs also forced other nations to respond in kind, making it difficult for farmers to export their surpluses.”1

“The Republicans and their presidential candidate, Benjamin Harrison, received large campaign contributions in 1888 from industrialists who benefited from high tariffs.”2

“The McKinley Tariff was intended to protect American industry from foreign competition and encourage consumers to buy American goods. Instead, it helped trigger a steep rise in the price of all goods, which angered many Americans.”3

Sound familiar? By the way, these three quotes came from a history book published in 2010—long before the Trump era. Just wanted to clear that up, just in case.

I also came across this regarding the McKinley Tariff debate:

The McKinley Tariff of 18904

“On October 1, 1890, the McKinley Tariff became law—boosting protective tariff rates to nearly 50 percent on average for many American products. Ways and Means Committee Chairman William McKinley of Ohio led the effort in the House. The new legislation increased rates for many manufactured goods while placing items such as sugar and coffee on the free list.

When Richard W. Townshend of Illinois, a stalwart Democratic opponent, delivered his customary protest against the measure on the House floor, Republicans jeered him. Speaker Thomas Brackett Reed of Maine dryly explained, ‘It is not the speech we complain of so much as the monotony of the thing; we want a change.’

The House passed the bill 164 to 142, and it slowly worked its way through the Senate. President Benjamin Harrison convinced Senate allies to insert a provision permitting the President to raise duties to match foreign rate hikes and to sign agreements to open foreign markets without congressional approval. McKinley unsuccessfully opposed the reciprocity provision, arguing that it yielded closely held congressional powers.

Many voters, perceiving the McKinley Tariff as a boon to wealthy industrialists, registered their displeasure at the polls that fall. House Republicans lost 93 seats, and Democrats swung comfortably into a commanding majority.”

Then, you have the Hawley-Smoot Tariff of 1929. Here is a quote from the same high school history book.

“In 1929, Hoover wanted to encourage overseas trade by lowering tariffs. Conservative Republicans, however, wanted to protect American industry from foreign competition by raising tariffs. The resulting legislation, the Hawley-Smoot Tariff, raised the average tariff rate to the highest level in American history. In the end, it failed to help American businesses because foreign countries responded by raising their own tariffs. This meant fewer American products were sold overseas. By 1932, exports had fallen to about one-fifth of what they had been in 1929, which hurt both American companies and farmers.”5

So, 135 years after the McKinley Tariff and 96 years after the Hawley-Smoot Tariff, we’re back to the tariff debate—something that didn’t work then but, somehow, some people think is going to work now.

My son asked me, “Dad, why is the U.S. implementing tariffs if they are bad?” I told him, “Because some people don’t learn from the past and like to keep making the same mistake over and over.” Then we had a nice discussion.

I believe someone needs to go back to high school and pay attention in history class. They might just learn a few things from a $30 history book—saving America billions of dollars and maybe even a few headaches.

  1. The American Vision (1st Edition) Modern Times, Student Edition (UNITED STATES HISTORY (HS)) (p. 235) by Mcgraw-Hill Education, Glencoe Mcgraw-Hill, Albert S. Broussard, Joyce Oldham Appleby, Alan Brinkley, James M. Mcpherson, Donald A. Ritchie, Professor Joyce Appleby Hardcover, 1,024 Pages, Published 2010 by Mcgraw-Hill Education ↩︎
  2. Ditto. (p. 236) ↩︎
  3. Ditto. (p. 236) ↩︎
  4. https://history.house.gov/Historical-Highlights/1851-1900/The-McKinley-Tariff-of-1890/ ↩︎
  5. The American Vision (1st Edition) Modern Times, Student Edition (UNITED STATES HISTORY (HS)) (p. 405) by Mcgraw-Hill Education, Glencoe Mcgraw-Hill, Albert S. Broussard, Joyce Oldham Appleby, Alan Brinkley, James M. Mcpherson, Donald A. Ritchie, Professor Joyce Appleby Hardcover, 1,024 Pages, Published 2010 by Mcgraw-Hill Education  ↩︎

73 thoughts on “The Tariffs Debate”

    1. You’re welcome, Brian, and thank you for your comments. I get frustrated sometimes with people who want to go back to the 1800s and early 1900s—people who don’t understand what actual hard work means. People who had everything given to them and somehow think those were great and easy days. It’s crazy.

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      1. ‘Pleasure Edward. Frustration is the name of today’s game. I suspect the only “remedy” to frustration is getting in touch with people who feel the same… I’m glad I stumbled on your blog.
        Stay safe.

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  3. Edward, thank you for sharing the history of failed tariffs in the US.

    So many politians are uninformed about history, geography, and worldwide cultures. Worse, they seemingly have no desire to learn.

    I am impressed that you are involved with your son’s education. Democracies need informed voters.

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    1. Thank you, Cheryl. I think what you said about them not desiring to learn is very accurate. Some of them don’t care about the well-being of people at all and are only doing this for personal gain, which is just sad.

      I’m on the nerdy side, so I really enjoy the daily schoolwork with my son.

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  5. Brilliant post, as always, Edward! I love your conversations with your son. That’s how intelligent voters come into being.

    Unfortunately, one must have a modicum of intelligence to read, comprehend, and make connections. One must be sane to realize that doing the same thing the same way will result in the same outcome. One must not have an ego that overrides documented fact. The current administration is 0/3 on this front.

    “Many voters, perceiving the McKinley Tariff as a boon to wealthy industrialists, registered their displeasure at the polls that fall. House Republicans lost 93 seats, and Democrats swung comfortably into a commanding majority.” Here’s hoping this part of history repeats itself.

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  7. This foreigner is looking at the US and thinking things like let’s scrap AUKUS and which American companies should I boycott. Certainly the ones that would dismantle the Pharmaceutical Benefits Scheme, which insists on justifying prices charged to the Australian government and every Australian.
    Small tariffs might help protect industries, big ones tend to make them both greedy and lazy.

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    1. I think your last comment is spot on. A small one targeting certain sectors might help, but the ones the U.S. is implementing aren’t helping anyone—well, except for a few millionaires capitalizing on this madness.

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  8. How timely to find this book and the tried and true methodology that applies now! What a wonderful opportunity to have this time and discussion with your son! Sadly, they haven’t learned …. Maybe you should write one yourself; “History 101 for dummy’s” 😎 Nice post, Edward! 💓

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  9. Excellent article, Edward! Solid supporting evidence for the introductory quote and how wonderful that this led to a meaningful discussion between you and your son. 👍🏻 A most concerning situation.

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    1. Thank you, Michele. I know, right? He even mentioned the high price of eggs! I was kind of excited, and my mind traveled a few years into the future—I pictured myself sitting with him, talking about life. It’s something I didn’t have and something I long for.

      I’m with you; it’s a very concerning situation.

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  11. I’ve said from the beginning that the US President needs to take a basic economics course. The reason countries trade is because it benefits both sides, and tariffs just make life unaffordable. I sort of understand the “made in America” desire, but I don’t think there’s any way the USA can meet its own demand for consumption—especially if they are scaling back immigration.

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    1. I agree 100%. There aren’t many “Made in America” products the last time I checked, and it’s going to take a long time (probably decades) and good leadership to change that. Imposing tariffs on our friends is the wrong approach.

      I actually read an essay this morning in The Economist titled America’s New Foreign Policy, and it says: “This loss of faith also reflects a dawning realization that coercing allies is an inevitable consequence of the MAGA value-free agenda. Allies’ interdependence means that America has more leverage over them than over foes such as Russia or China.”

      This is really sad. We should be working with our friends in Canada, Mexico, and Europe to figure out how to improve our economies in order to push back against Russia and China. Instead, we are bullying our friends to obtain quick wins in order to satisfy Trump’s base.

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  13. Thanks for sharing this information, Edward. I’m so glad to hear that you and your son have had discussions about these topics. A healthy world begins with healthy discussions at home.
    For the last 10 years, I’ve repeatedly consulted my college textbooks on American History and Western Civilization, and have read more historical books from my local library. And that’s so a regular citizen like me with a very limited understanding of politics can gain a tiny bit of knowledge about what’s going on. It confounds me that some career politicians seem to have no concept of the history of the items they bring forth on their platforms.

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    1. You’re very welcome, Rose. Your last sentence is spot on, especially with our current leader. I know he is a person with a very narrow worldview who does not like to engage in serious reading, so that is definitely impacting his ability to make good and rational decisions.

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  14. Hi Edward, I am familiar with US history as it relates to Tariffs. This particular economic policy has also failed elsewhere in the world. I was rather astonished when I saw it being instrumented by the current administration. Isolation policies have been proved to fail over and over again.

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    1. I know, it’s just crazy. I’m also monitoring the situation in the U.S. and South Africa, and it’s really sad. I don’t even know the real reason the U.S. is targeting your country.

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      1. The South African government does deserve some of what its receiving as the ANC administration is very corrupt and has done huge damage to this country. Elon Musk seems to be trying to create a disaster here through which is terrible for South Africans. It is the ordinary people who will suffer.

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  16. Not learning from the past doesn’t seem very sapient, something that supposedly defines our species (Homo sapiens). Even the animals do it and pass it on to the next generations. It not only sounds stupid and counterproductive but also is a clear blockage to evolution. At least the younger generations know it (since it’s in their textbooks) and will have the chance to see live what happens when we refuse to learn from experience and insist on unreasonably using power. We know how it will end… There’s nothing new to this story. The sad thing is that in the meantime, many will suffer and fall into despair. Neglecting real people’s necessities and suffering is far beyond the acceptable, especially when it comes from their leaders. Far beyond the well-being all deserve and should be provided by their background. Thank you, Edward, for this very insightful and well-framed post. I appreciate reading it and knowing a little bit more about this hot topic. Thank you! Lots of light and blessings to you, my friend; have a peaceful day 🙏✨

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    1. Thank you so much, Susana. You said it well: “We know how it will end… There’s nothing new to this story.” I just hope we don’t repeat this mistake 100 years from now. Blessings, my friend.

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  17. I’m glad to have the concrete history of how the tariffs did not work for the average person a hundred years ago (except for the wealthy industrialists). Somehow I think the average person’s economic woes are not the centerpiece of current policies.

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  18. Thank you for this, Edward. Being Canadian, I of course have very strong opinions on the entire tariff thing. I’m absolutely confounded by the hold he has on his followers. I guess until reality sets in and it starts to hit close to home, they just won’t “get it” because they don’t want to. A big part is voting on party lines regardless of who’s in power. That’s much the same in Canada too and right or wrong, it’s a practice I’ve never personally followed. Once I’ve heard them all, I vote for a candidate, not a party.

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    1. You’re very welcome, Terry. I completely agree with you on voting for a candidate, and his or her platform, not a party. The two-party stronghold we have in this country is creating a lot of issues. I’m hoping that one day we can get to a place where three or four parties compete, so we can have a more balanced Congress and more collaboration, because what we have right now is not working for us.

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  19. Good for you, having a smart son who asks questions, and for having those discussions with him. Why people have drunk the Trump Kool-Aid and keep drinking it is beyond me. I’m getting by, as prices continue to rise.

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    1. Thank you, Melissa. I don’t understand it either—people are drinking it without question. You know, one thing (of many, of course) that bothers me about his supporters is that they believe he is one of us—a person who was born a millionaire and probably never even bought his own groceries. 🤦🏻‍♂️

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  21. And at the same time maintain some of our allies. Ed, this is a great expose on the tariffs bringing an understanding of how this affects not just making “America” great again but others. I am so irritated with certain hands being in everything at once. Thank you for sharing. You always bless me with a deeper understanding of things and provocative thought. Do you think we should purchase a few of things history books and send a care package to the White House?

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  27. Yes. Just yes. As well, and it’s probably due at least as much or more to Trump’s disrespectful trash talk about his traditional friends and allies, he has created an environment where nobody wants to have anything to do with purchasing anything that has a “made in USA” label on it. So his tariffs are raising prices both within and outside the U.S. and his tariffs and insulting approach are constricting his market. Interesting strategy.

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    1. Interesting indeed. There is definitely something wrong with him and his strategy. There aren’t a lot of “Made in USA” products around the country, so his strategy is going to hurt Americans in the end. We’ll add the 2025 tariffs failure to the history books in future editions.

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