On Trade, Trump Takes Republicans Back to Their Roots
The likely nomination of Donald Trump as the Republican presidential candidate will be another milestone for a candidate who built his campaign by defying party orthodoxy.
Among the most surprised by this turn of events is the U.S. Chamber of Commerce, long considered an auxiliary organ of the Republican Party. The business group has sternly rebuked Trump for his fevered denunciations of free trade, one of the party's articles of faith. Other party elders have joined the chorus.
Yet perhaps the party establishment and its allies shouldn't be so shocked. For vast spans of U.S. political life, Republicans, far more than Democrats, have demanded tariffs to protect the economy and American workers. Trump is simply reviving an economic vision first articulated by the party in the first century of its existence.
Tariffs have been around since the founding of the republic. But as a matter of U.S. policy, they only became a divisive political issue in the antebellum era, when a conflict pitted the Democratic Party against the Whigs. When the latter party collapsed amid the sectional crisis of the 1840s and 1850s, the Republican Party emerged to fill the void.
At first, the new political bloc contained both free traders and protectionists, but the fiscal demands of the Civil War led Republicans to enact tariffs on almost every imported good. By the time the conflict ended, the average tariff on imported goods was 48 percent. But this, many politicians believed, was a temporary measure.
But that wasn't how the debate played out. After the war, in 1866, the logical moment for tariffs to return to ordinary levels, Republican Senator Justin Morrill of Vermont introduced a bill aimed at raising tariffs further. As the historian Nicholas Barreyre has observed, there was no way this move could be justified on fiscal grounds. It was protectionism, pure and simple.
The debate foreshadowed the future of the Republican Party. On the floor of the Senate, Morrill spoke in favor of the bill, declaring that protective tariffs would “place the American laborer, producer, or manufacturer upon a level of fair competition with foreign capital and foreign labor.”
Like Trump today, Republicans relied on rhetoric to justify the Morrill tariff duties, which brought together xenophobia and bare-knuckles patriotism. Republican Representative William Kelly of Pennsylvania declared that a failure to hike tariffs was tantamount to treason, because it would encourage Americans to invest in the “enemy’s territory” instead of at home -- the “enemy” country, in this instance, being Canada.
The Morrill bill never became law. But the arguments would be revived to great effect in future decades, becoming a central part of the Republican platform. Tariffs came to cover a staggering range of imported goods. These weren’t designed to protect struggling infant industries; they were aimed at protecting mature, robust businesses.
It’s easy to view these tariffs as a function of Gilded Age corruption: businesses bought off politicians, protected themselves from foreign competition and otherwise frustrated free trade. But Republican leaders viewed protectionism as an “industrial policy.” Nevada Senator John P. Jones declared in 1876 that “one of the highest duties of Government” was to encourage domestic industry and to “preserve and protect such industries from destructive foreign competition.”
As the historian Charles Calhoun has observed, many of these leaders articulated a sophisticated theory of protectionism that effectively undercut arguments for free trade. Moreover, these same leaders believed that protectionism would benefit not merely American industry, but the nation's workers, too, who would otherwise remain mired in poverty. In a private letter to Republican Senator John Sherman of Ohio, Morrill declared: If Democrats are "successful in their free trade 'reform,' the only result must be a reduction in the wages of American labor.”
The tariff issue soon became the most obvious dividing line separating Republicans and Democrats. Although both parties harbored dissenters, Republicans generally favored tariffs; Democrats didn’t. After President Grover Cleveland (a Democrat) made a pitch for lowering duties, Sherman warned that if such a measure were approved, “It is the protective industrial policy built up by the Republican Party that they would break down.”
Protective tariffs remained central to Republican identity well into the 20th century. The 1928 party platform declared that we “reaffirm our belief in the protective tariff as a fundamental and essential principle of the economic life of this nation.” Two years later, Republican leaders pushed through the infamous Smoot-Hawley tariff, which many believe exacerbated the effects of the Great Depression. Nonetheless, in 1932, the Republican platform again declared the party as a “staunch supporter of the American system of protective tariffs.” As late as 1944 the party was still beating this drum.
Change began in the postwar era, and only gradually. The Republican Party's incremental retreat culminated in 1976 and 1980 with a full-throated advocacy of free trade and against protectionism, a position that it has elaborated and refined in the succeeding decades.
Until now. Trump may not know -- or care -- that he’s channeling a deeper tradition within his party that views protectionism as the way to protect the working class. In recent decades, a position that has come to be seen as the kind of talk only left-wing Democrats would indulge in.
It's equally likely that the Republican leadership doesn't have much use for this past, either.
Now, they may become reacquainted with that history. And in time, as improbable as it seems now, they may come to embrace it. The platform that will be approved at the party's national convention in Cleveland next week will offer the first hint.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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