The featured article in the May issue of Hillsdale College’s Imprimis Magazine is  “Tariffs in American History” by John Steele Gordon, author, An Empire of Wealth: The Epic History of American Economic Power.

Here are some excerpts from the article:

Tariffs are among the oldest of taxes for the simple reason that they are easy to collect. Just send in the tax collectors and don’t let the goods being transported move until the duty has been paid. Being one of the earliest forms of taxation, it is not surprising that tariffs produced one of the earliest forms of tax evasion: smuggling.

In America’s colonial period, the east coast of the United States, with its many rivers and inlets that the small ships of those days could utilize, lent itself to smuggling, and the American colonists evaded British tariffs on a grand scale.

Indeed, Rhode Island, with its long coastline relative to the area and its many small harbors, was the epicenter of colonial smuggling, and it opposed any attempts to suppress it. Rhode Island was the first colony to foreswear allegiance to Great Britain, on May 4, 1776, two months before the Declaration of Independence. It was also the only state not to send delegates to the Constitutional Convention in Philadelphia in 1787, fearing that a stronger federal government, empowered to tax, would suppress smuggling. And it was the last state to ratify the Constitution, on May 29, 1790, more than a year after the federal government had come into existence. It did so then only under the threat of having its exports taxed as if from a foreign nation.

When the Constitution took effect in 1789, the first order of business was to straighten out the nation’s disastrous financial situation. That is why the new State Department started out with only five employees while the Treasury Department had 40.

When Alexander Hamilton became the nation’s first Secretary of the Treasury, he immediately began to prepare a schedule of tariffs, along with excise taxes on such commodities as alcohol and tobacco. The Constitution forbids taxing the exports of any state, and so American tariffs have always been laid only on imports.

The article concludes:

One of the provisions agreed to by the U.S. in the early GATT negotiations following World War II was differential tariffs: the U.S. lowered its tariffs more than its trading partners did. Again, the purpose of this was to speed the economic rebuilding of allies and former enemies who had suffered devastation during the war. But World War II has now been over for 80 years. The economic recovery of Western Europe and the Far East has long since been accomplished. Yet the differential tariffs in many cases are still in existence.

The U.S., for instance, has a 2.5 percent tariff on cars imported from Germany, while Germany has a ten percent tariff on American cars. In addition, Germany’s value-added tax is remitted on exports but charged on imports. As a result, while the logos of Mercedes-Benz, BMW, and Volkswagen are seen all over American roads, those of Ford and General Motors are a rare sight in Germany. And China, as already noted, is far worse, a world outlier, in terms of its nefarious trade policies.

President Trump wants to level this playing field. To do so, he has started what some are calling a trade war and others are calling the greatest example of “the art of the deal” in history. We will have to wait and see how it plays out.

The question we might want to ask ourselves is, “Is the media giving tariffs a bad rap because President Trump is putting them in place or because they are actually bad?”