Changes

The In the late 18th century, Great Britain began to dominate oceanic trade with its powerful navy. At this time, tariffs were very high, roughly 50 percent, which made the import of goods mostly uneconomical. This reflected the political era, where Britain competed with France and Spain for dominance of the high seas, where each actor attempted to limit trade with the other. Tariffs in the early 19th century were still high; however, Britain's trade in given products began to greatly expand during the early Industrial Revolution, slowly influencing its outlook on trade. Gradually, Britain reduced tariffs and entirely removed them for food commodities in 1840s with the repeal of the Corn Laws (Figure 2). This was, in part, motivated by events in Ireland, which was experiencing the Great Famine that led to a need to export food. Tariffs were often seen as a way to protect domestic industry and economic sectors such as agriculture. Gradually, throughout the 19th century, as industrial production increased, reducing tariffs was seen as a way to benefit economies looking towards exports of manufactured goods as a mean to growth their economies and through trade. This followed a general trend throughout Europe, as the economies became more integrated and greater trade now began to flow, resulting in reduced tariffs in Europe. Rather than reduce competition, however, increased trade spurred countries to emulate each other. Germany in particular began to greatly expand its industries as it rapidly developed its economy and began to be more competitive in trade.<ref>For more on 19th century tariffs and changing attitudes towards them throughout the 19th century in Europe and Britain, see: Howe, Anthony. 1997. <i>Free Trade and Liberal England, 1846-1946</i>. Oxford : New York: Clarendon Press ; Oxford University Press. </ref>

In the late 18th century United States, tariffs were seen as a way for the federal government to generate revenue, as income and other forms of federal taxes had yet to be established. By the early 20th century, political parties were beginning to take sides in the debates about tariffs. The Tariff of 1789 was one of the first policies enacted that stipulated the rates and types of tariffs in the United States. Throughout much of the early 19th century, the United States generally kept low tariffs. The South of the United States, in particular, supported very low tariffs. When the federal government attempted to raise tariffs in 1828, the state of South Carolina threatened full rebellion against the federal government. Economic exports of cotton in particular would have been threatened by higher tariffs. After the 1850s, however, with economic hardship that also occurred after the Civil War, gradually most of the country supported high tariffs on goods. This trend continued through the two World Wars. The United States was largely seen as a protectionist economy that made it difficult for foreign countries to penetrate the US market. During the early 19th century, the Whigs supported high tariffs, whereas it was the Democrats who supported low tariffs. From the late 19th century, Europe and the United States were seen as largely became almost complete separate economies that had little interaction. Tariffs in the United States ranged between 40-50 percent, while it was 9-12 percent in Europe. After the 1930s Great Depression, most countries expanded tariffs and global trade was severely limited as countries tried to protect their domestic industries that were strugglingfrom economic slow-down. Economists still debate if tariffs exacerbated the Great Depression. The Smoot–Hawley Tariff Act of 1930 exemplified thisprotectionist attitudes, with over 10,000 items listed in tariffs. This did cause retaliatory measures by different countries, including Canada, which shifted much a lot of its trade to the British Empirein large part due to the tariff.<ref>For more on the early history of US tariffs, see: Taussig, F. W. 2005. <i>The Tariff History of the United States</i>. Chestnut Hill, Mass.: Elibron Classics. </ref>