(New York) Donald Trump has given him a nickname that he would probably like to inherit one day: the “king of tariffs”. Who is it about? By William McKinley. William who?
Posted at 12:00 a.m.
The 25the President of the United States is among George Washington's successors who did not leave the most lasting or favorable impression. But few Republicans have done more than Trump in recent years to bring it back into line. Historians and economists find it difficult to explain the president-elect's admiration for this occupant of the White House.
But those who want to understand the origin of his obsession with customs tariffs should pay attention to this funny story.
The tariff debate of 1888 taken as an example
Trump expressed his admiration for McKinley several times during the last presidential campaign. An example:
“In the 1890s, our country was probably the richest it had ever been because we had a tariff system,” he said during a trip to Michigan last September. We had a president, you know McKinley? […] He was a very good businessman, who raked in billions of dollars at the time. We were a very rich country at the time. »
This statement contains two errors. First, the United States experienced serious economic problems during the 1890s, including a depression that lasted from 1893 to 1897. Second, McKinley was not a businessman.
Another Trump statement may explain where he got his idea that tariffs brought the United States to peak prosperity in the 1890s.
“You know, they had a debate in… It was the great tariff debate of 1888,” recounted the 45e president during a two-hour speech to a group of conservatives in 2019. “And the debate was about the fact that we didn't know what to do with all the money we were making. We were so rich. »
Even if this debate seems very distant, we are getting to the heart of the matter, or rather of Donald Trump's obsession with customs tariffs. At the end of the 19th centurye century, these had two objectives in the United States: to generate revenue for the federal government at a time when the income tax did not exist and to protect manufacturers from foreign competition.
A little history
Held high since the start of the Civil War, these customs tariffs ended up creating budget surpluses which led to this famous debate to which Trump alluded during his 2019 speech. Thus, during the presidential campaign of 1888, the Democratic candidate pledged to reduce the customs tariffs for which his electorate, largely from rural regions, was paying the price.
The Republican candidate was not opposed to the idea of reducing these surpluses. But he believed he could achieve this not by reducing customs tariffs, but rather by increasing them!
Such a policy, he said, would reduce government revenue by discouraging Americans, once and for all, from purchasing foreign goods.
This candidate, Benjamin Harrison, lost the popular vote, and therefore the great tariff debate. But he was elected to the presidency thanks to the famous electoral college. So the Republicans believed they had to follow through on their idea of increasing customs tariffs.
This is where William McKinley enters this story. In 1890, as chairman of the House Tax Committee, he drafted a bill that raised the average tariff on all imports from 38 percent to 49.5 percent.
The law, which will contribute to a rise in consumer prices, will prove catastrophic electorally. In the 1890 midterm elections, the Republicans lost 86 seats in the House (and the presidency in 1892).
McKinley had changed his tune
The question, of course, is why Trump ignores this history when he extols the virtues of McKinley and his tariffs. It is tempting to believe that he only learned one fact from this story: customs duties have already created budget surpluses.
Hence perhaps his idea that customs tariffs harbor an almost magical power.
A power which, according to him, will not only bring manufacturing back to the United States, but also curb deficits, help middle-class families pay for childcare costs and perhaps even be able to eliminate this pesky income tax.
The irony is that Donald Trump seems to have ignored William McKinley's developments on customs tariffs after his election to the White House in 1896. Election supported by the greatest fortunes, including that of John D. Rockefeller, the richest American of the time and one of the leading figures of the Gilded Age, an era marked by brazen wealth gaps in the United States.
Re-elected in 1900, President McKinley began to turn his back on all-out protectionism at the start of his second term. “Reciprocal trade agreements with other nations should, in a liberal spirit, be carefully cultivated and encouraged,” he said in his second inaugural address.
Later, he added this phrase that his neighbors to the North and South should remind Trump of: “Trade wars are not profitable. A policy of goodwill and friendly business relations will help avoid retaliation. »
William McKinley didn't really have time to follow through on his new ideas. An anarchist assassinated him on September 14, 1901.