America Is no Stranger to Tariffs

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"The U.S. officially places tariffs on $34 billion worth of Chinese goods. China retaliates."

Let's not kid ourselves...tariffs are a big deal. But you should keep in mind that they're nothing new. Here are five other tariffs from U.S. history that you'll want to use in any casual trade war conversations you have at the bar.

The Tariff Act of 1789

Before he was tap dancing on Broadway, Alexander Hamilton argued that a young America needed to institute tariffs. His thought process?

• Taxes on imported goods would be a vital revenue source for the federal government.
• Tariffs would encourage the development of American industry by protecting them against foreign goods.

So on Hamilton's urging, George Washington signed the country's first-ever tariff legislation in 1789...though it was very tame. Most imports received a 5% tax.

1828: The "Tariff of Abominations"

Remember how the South and North used to despise each other? Well, this tariff is one reason why.

It placed a tax on imported goods (specifically targeted at cheap British products) in order to help the manufacturing industry—which was concentrated in the North.

The agricultural South, on the other hand, felt that they had to pay more for goods without reaping any of the benefits of the tariffs. South Carolina even took it upon itself to declare the tariffs unconstitutional.

1930: Smoot-Hawley Tariffs

Picture a lone tumbleweed drifting across a deserted main street in small-town America.

This was the setting of probably the most famous tariffs in U.S. history, when Senator Reed Smoot and Representative Willis C. Hawley tried to boost the domestic economy in response to the stock market crash of 1929.

Unfortunately, the import taxes (of up to 50%) backfired. According to UGA professor Stephen Mihm, the legislation "was a disaster for both the American economy and the global system of trade."

2002: Bush's steel tariffs

President Bush set out to help the domestic steel industry by putting up to 30% tariffs on steel imports (Mexico, Canada, and others were exempt).

But after they were reversed in late 2003, the tariffs didn't appear to move the economic needle. Jobs were lost, or gained, depending on who you ask. One analysis found that GDP took a (very minor) hit.

2009: Obama's tire tariffs

Responding to a flood of Chinese tires entering the market, President Obama slapped a 35% tariff on...well, Chinese tire imports.

Did they work?

• The Peterson Institute found that the tariffs saved a maximum of 1,200 jobs, but came at a high cost to U.S. consumers. In fact, the best part about the tariffs, they wrote in April 2012, was that "they expire in September."

Via Light Roast / Morning Brew