McKinley’s Tariffs: Economic Protection or Political Disaster?
Trump’s reference to President William McKinley’s use of tariffs is an interesting historical parallel, but the effectiveness of McKinley’s tariff policies remains a subject of debate. While tariffs were central to his economic strategy, their long-term impact was complex.
McKinley, a staunch protectionist, championed high tariffs as a means to protect American industries from foreign competition. His most notable policy was the McKinley Tariff of 1890, which raised duties on imported goods to nearly 50%. Later, as president, he signed the Dingley Tariff of 1897, the highest tariff in U.S. history at the time. These measures were intended to shield domestic industries, encourage industrial growth, and generate government revenue. However, their effects were both beneficial and problematic.
How Effective Were McKinley’s Tariffs?
✅ Pros (Short-Term Successes)
- ✅ Boosted Domestic Industry
High tariffs protected American manufacturers from foreign competition, fostering growth in industries such as steel, textiles, and agriculture. - ✅ Increased Government Revenue
At the time, tariffs were a primary source of federal income, unlike today, where they play a minor role. - ✅ Economic Growth
The economy rebounded from the Panic of 1893 during McKinley’s presidency, with industrial production and employment rising. Some credit tariffs for stabilizing key industries. - ✅ Helped Shift the U.S. Toward Expansionism
Protectionism fueled economic nationalism, and McKinley’s presidency coincided with the U.S. acquiring territories like Puerto Rico, Guam, and the Philippines after the Spanish-American War.
❌ Cons (Long-Term Consequences)
- ❌ Higher Prices for Consumers
Tariffs made imported goods more expensive, raising costs for ordinary Americans, particularly farmers reliant on foreign goods. - ❌ Retaliation from Trading Partners
Other countries imposed their own tariffs in response, hurting U.S. exports. The McKinley Tariff created tensions with Latin America and Europe, reducing markets for American goods. - ❌ Political Backlash
The McKinley Tariff was so unpopular that it contributed to the Republican Party’s massive congressional losses in 1890. Many voters—especially farmers—blamed high prices and economic struggles on the tariff. - ❌ Did Not Prevent Future Economic Instability
While the economy grew under McKinley, his protectionist policies did not prevent later economic downturns. High tariffs remained a divisive issue, and later policies (such as the Smoot-Hawley Tariff of 1930) worsened the Great Depression.
The End of McKinley’s Era
McKinley’s presidency was cut short in 1901 when he was assassinated by an anarchist, reflecting the growing unrest over economic inequality and corporate power. His death led to Theodore Roosevelt’s rise to the presidency, which dramatically shifted U.S. economic policy.
Unlike McKinley, Roosevelt took a more aggressive stance against monopolies and corporate excess. Under McKinley, the economy had been dominated by industrial moguls like Rockefeller, Carnegie, and JP Morgan, with wealth heavily concentrated at the top.
Roosevelt’s presidency ushered in a new era of anti-trust legislation designed to curb the unchecked power of large corporations. His policies sought to give small businesses a chance to compete, in contrast to McKinley’s tariff policies, which had primarily benefited the wealthiest industrialists.
One of the most striking examples of the extreme wealth disparity at the time was that JP Morgan personally loaned money to the U.S. government to stabilize the economy — highlighting the immense influence of private financiers over national policy.
Do Tariffs Still Work?
While McKinley’s tariffs were part of a broader industrialization strategy in a pre-globalized world, Trump’s tariffs were implemented in an era of deep economic interconnection. Unlike McKinley’s time, when the U.S. relied on tariffs for revenue, modern tariffs are more of a bargaining tool in trade negotiations.
McKinley’s tariffs had both successes and drawbacks — boosting domestic industry and government revenue but also raising consumer prices and fueling political unrest. Similarly, Trump’s tariffs aimed to strengthen American manufacturing but faced criticism for disrupting supply chains and straining global alliances.
Final Thought: Are Tariffs a Double-Edged Sword?
McKinley’s legacy illustrates the cyclical nature of protectionism in American economic history. His tariffs helped bolster industry in the short term but contributed to economic and political tensions in the long run. The backlash against his policies, combined with his assassination, set the stage for Roosevelt’s trust-busting reforms, which reshaped the U.S. economy.
💬 Join the Conversation
What do you think?
Were McKinley’s tariff policies a success, or did they create more problems in the long run?
And how do they compare to modern trade policies?
📩 I’d love to hear your thoughts. Email me at bob.gallagher@mtwx.ca