High tariffs

Definition

High tariffs are taxes imposed by a government on imported goods, aimed at making foreign products more expensive to protect domestic industries. These tariffs can stimulate local manufacturing by discouraging imports, which played a significant role in the rise of big business and industrialization in the United States during the late 19th century.

5 Must Know Facts For Your Next Test

1. High tariffs were implemented in the U.S. during the late 19th century to promote American industry and protect emerging domestic businesses from foreign competition.
2. The Tariff Act of 1890, also known as the McKinley Tariff, raised duties on imports to record levels, reflecting a strong protectionist sentiment at the time.
3. High tariffs can lead to trade disputes with other countries, as they may retaliate with their own tariffs, affecting international relations.
4. One of the consequences of high tariffs was the growth of monopolies and trusts as domestic industries benefited from reduced competition.
5. The debate over high tariffs was central to U.S. politics in the late 1800s and early 1900s, influencing political platforms and elections.

Review Questions

• How did high tariffs impact American industry and consumer prices during the period of industrialization?
  • High tariffs were designed to protect American industries from foreign competition, leading to an increase in domestic production. While this helped local businesses grow, it often resulted in higher prices for consumers, as imported goods became more expensive. The protective measures allowed some industries to thrive but created a complex economic landscape where consumers faced limited choices and elevated costs.
• Evaluate the effectiveness of high tariffs as a tool for economic growth in the United States during the late 19th century.
  • High tariffs were effective in fostering economic growth by encouraging domestic production and investment in U.S. industries. However, while they helped certain sectors flourish, such as steel and textiles, they also led to economic inefficiencies and inflated prices for consumers. The reliance on tariffs raised questions about long-term sustainability and whether such protectionist measures truly benefited the broader economy.
• Discuss the implications of high tariffs on U.S. foreign relations and international trade policies in the late 19th century.
  • High tariffs often strained U.S. foreign relations, as other nations viewed them as barriers to trade. Retaliatory measures taken by affected countries could escalate into trade wars, undermining diplomatic ties. This situation necessitated a delicate balance between protecting domestic interests and maintaining healthy international trade relationships, shaping U.S. foreign policy decisions in this era and influencing future negotiations regarding trade agreements.

Related terms

Protectionism: An economic policy that restricts trade between countries through tariffs and other regulations to protect domestic industries.

Tariff Act of 1890: A significant piece of legislation that raised duties on various imports, aiming to support American agriculture and industry.

Industrial Revolution: A period of major industrialization during the late 18th and early 19th centuries that transformed economies from agrarian to industrial, significantly impacting trade and manufacturing.