average tariff on imports - piieaverage tariff on imports 2 0 10 20 30 40 50 60 70 1790 1810 1830...
TRANSCRIPT
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Average tariff on imports
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1790 1810 1830 1850 1870 1890 1910 1930 1950 1970 1990 2010
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Dutiable ImportsTotal Imports
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Major themes
• Trade policy has always been a divisive political issue
• Yet trade policy also shows continuity (status quo bias)
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Why continuity?
• Persistence in geographic location of production
• Persistence in composition of exports & imports
• Persistent regional economic interests
• Political power based on geography → voting patterns in Congress
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House of Representatives votes on the 1828 Tariff (a) and 1929 Smoot-Hawley Act (b)
Map courtesy Citrin GIS/Applied Spatial Analysis Lab, Dartmouth College
(a) (b)
Stable political geography
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Persistent tariff structure, 1867 - 1939
ChemicalsEarthenware
Metals
Wood
Sugar
Tobacco
Agriculture
Spirits
Cotton
Flax
Wool
Silk
Pulp
050
100
150
Tarif
f in
1939
0 50 100 150Tariff in 1867
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Not all continuity, some change
1. Revenue (1790-1860)
2. Restriction (1860-1934)
3. Reciprocity (1934-present)
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Transitions
• Civil War
political power shifts to Republicans (North)introduction of high tariffs
• Great Depression
political power shifts to Democrats (South)delegation of negotiating authority to president
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Explaining Policy Persistence:few political transitions
• 1837-1861 – Democrats (South) dominate• 7 unified (6 D, 1 R), 5 divided• 2 transitions
• 1861-1933 – Republicans (North) dominate• 21 unified (17 R, 4 D), 14 divided• 4 transitions
• 1933-1993 – Democrats (South/North) dominate• 16 unified (15 D, 1 R), 14 divided• 2 transitions
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Average tariff on imports
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1790 1810 1830 1850 1870 1890 1910 1930 1950 1970 1990 2010
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Dutiable ImportsTotal Imports
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Various themes
• Always concerned about foreign “unfair” trade practices
• Presidents usually don’t know much about trade
• Partisan positions rooted in economic geography
• Populists always upset with status quo
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Partisan switch
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1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
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Republicans
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NAFTA
CAFTA
Trade Act of 1970
Colombia
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• SANDERS: I voted against NAFTA, CAFTA, PNTR with China. I think they have been a disaster for the American worker. A lot of corporations that shut down here move abroad. Working people understand that after NAFTA, CAFTA, PNTR with China we have lost millions of decent paying jobs. We're in a race to the bottom, where our wages are going down. Is all of that attributable to trade? No. Is a lot of it? Yes. TPP was written by corporate America and the pharmaceutical industry and Wall Street.
• Q: So basically, there's never been a single trade agreement this country's negotiated that you've been comfortable with?
• SANDERS: That's correct.
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Myths
• Tariff as cause of Civil War
• Protectionism made America great
• Smoot-Hawley “caused” the Great Depression
• Massive post-World War II tariff give away
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Episodes
• Jefferson’s trade embargo (December 1807 – March 1809)
• Tariff of Abominations (1828)
• Smoot-Hawley tariff (1930)
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Tariff of Abominations (1828)
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Willis Hawley & Reed Smoot
• Politicians using interests, not interests using politicians
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Downward Spiral of World Trade
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Cordell Hull Secretary of State 1933-44
"I will never falter in my belief that enduring peace and the welfare of nations are indissolubly connected with friendliness, fairness, equality and the maximum practicable degree of freedom in international trade."
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Current disenchantment
• Renewed partisan conflict in post-Cold War era• Lost link to foreign policy
• Increased trade with developing countries• NAFTA and the “China shock”
• Declining employment in manufacturing*
• Consequence → increased partisanship over trade
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1860 1880 1900 1920 1940 1960 1980 2000
Part
isan
ship
Inde
x
Hawley-Smoot
NAFTA
CAFTA
Trade Expansion Act
RTAA
Bipartisan consensus
KoreaColombia
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Return of Joseph Wharton?
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Four eras?
1. Revenue (1790-1860)
2. Restriction (1860-1934)
3. Reciprocity (1934-present)
4. Retreat (2017-?)
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Conclusions
• Trade has always* been a source of domestic political conflict
• Partisan conflict renewed in the post-Cold War era
• Strong status quo bias in the system