The McKinley Tariff Policy Revisited

In the annals of American economic policy, few presidents have a more lasting association with the art of protecting domestic industry than William McKinley. Elected in 1896 amid the din of economic despair wrought by the Panic of 1893, McKinley’s presidency marked a pivotal chapter in America’s long dance with tariffs. His policies—deliberate, unapologetically protectionist, and almost surgical in their impact—did not merely reflect the industrial ethos of the time. They actively shaped it, for better or worse.

But what were McKinley’s tariffs really about? Were they a bulwark for the working class or a gilded gift to the tycoons of steel and textiles? And, perhaps more critically, what lessons do they offer in today’s landscape of de-globalization, supply chain disruptions, and tariff wars?

America Pre-Tariff Policy

Before becoming president, William McKinley was already a towering figure in tariff debates as chairman of the House Ways and Means Committee. The McKinley Tariff of 1890, enacted under President Benjamin Harrison, raised average tariff rates to almost 50%. This wasn’t subtle: the goal was to protect burgeoning American industries from foreign competition. What it achieved, however, was more complex.

American manufacturers initially welcomed the tariff as a shield against European imports, but consumers felt the sting of higher prices. This economic tension arguably contributed to Harrison’s defeat in 1892 and ushered in a brief Democratic experiment with lower tariffs under the Wilson-Gorman Act of 1894.

Yet the pendulum swung back with a vengeance under McKinley’s presidency. By the time he entered office in 1897, McKinley was ready to double down.

Why Tariffs, McKinley's Dingley Act of 1897 & The Gold Standard

To understand McKinley’s fixation on tariffs, it helps to start with the crisis that catapulted him into the presidency: the Panic of 1893. A cataclysmic collapse of the financial system had left banks failing, factories shuttered, and unemployment soaring. The nation’s reliance on volatile silver-based currency and low tariffs under the Democratic administration of Grover Cleveland only deepened the pain, at least in the eyes of protectionists like McKinley.

McKinley believed that tariffs could do three things: stabilize the economy, protect American workers from the downward pressure of cheaper foreign goods, and give the U.S. government a steady revenue stream without resorting to direct taxation. This trifecta of goals would become the backbone of his administration’s economic policy.

McKinley wasted no time. In 1897, just months into his presidency, he shepherded the Dingley Tariff Act through Congress. With average tariff rates soaring to nearly 57%, up from previous legislation setting tariffs at 50%, the act became the most protectionist measure in U.S. history up to that point.

The logic was simple: foreign goods were cheap because foreign labor was cheaper, and high tariffs would level the playing field. The Dingley Tariff wasn’t just about economics; it was political theater, a statement of faith in America’s industrial might. For McKinley, tariffs were not just fiscal tools but moral imperatives. He viewed protectionism as a way to ensure fair competition for American workers—a safeguard against what he termed the "pauper labor of Europe."

McKinley’s rhetoric sold the policy as a patriotic necessity. He positioned it as a moral choice, a way to ensure that American factories stayed open and that American wages stayed high. “Open the mills, not the mints,” McKinley proclaimed, in a not-so-subtle swipe at the populist push for free silver.

McKinley's tariffs were a key part of a broader vision for America’s place in the world. By the late 19th century, the U.S. was transitioning from an agrarian economy to an industrial superpower. Protectionism was, in McKinley’s eyes, a way to accelerate this transformation.

In this sense, tariffs were also a geopolitical tool. By insulating American industries, McKinley believed he could create a self-sufficient economy that wouldn’t need to bow to the whims of foreign markets. In an era when global supply chains were less complex but just as politically fraught, tariffs were seen as a way to reduce dependency on Europe while asserting the U.S.’s rising economic clout.

McKinley’s tariff policy was inseparable from his support for the gold standard, a position he cemented with the passage of the Gold Standard Act in 1900, a policy decision that would set the foundation for the Bretton Woods System in 1944 and, a few decades later, President Richard Nixon neutralizing the effect of the antecedent legislation of the gold standard against the US dollar but never repealing the gold standard with the Nixon Shock in 1971. The gold standard at the time offered financial stability, especially for creditors and industrialists, but it also deflated prices—a double blow to farmers already hurt by retaliatory tariffs. This combination of high tariffs and a tight monetary policy was a clear signal: McKinley’s economic vision prioritized industrial growth over agrarian concerns.

A Mixed Bag of Support For & Against the Dingley Tariff Act

Tariffs were not just a policy; they were a crusade. McKinley framed them as shields for the American worker, safeguards for the industrial economy, and instruments of national self-reliance. But like any great economic upheaval, McKinley’s protectionist push didn’t happen in a vacuum. It ignited fierce debate, drawing both passionate supporters and staunch detractors. The battle lines weren’t always where you’d expect. If tariffs were the lever of McKinley’s economic strategy, the factions pulling on either side told the story of a nation in flux.

The Dingley Tariff Act exacerbated existing divisions within the U.S., deepening the chasm between industrial North and agrarian South, between urban workers and rural farmers, and between Republicans and Democrats. These divides weren’t just economic; they were cultural and political. For Republicans, tariffs became a symbol of national progress and industrial power. For Democrats, they embodied the exploitation of the many for the benefit of the few.

McKinley’s policies set the stage for future economic debates, paving the way for progressive reforms under Theodore Roosevelt and the income tax revolution of the early 20th century. But the tariff wars of the 1890s left a lasting legacy of resentment, one that would echo in the populist movements of the Great Depression and even today’s trade disputes.

The Impact of Tariffs Across America

The strongest advocates for McKinley’s tariff policy were America’s industrial barons and the political machinery that supported them. For them, the Dingley Tariff Act of 1897, with its average rates of nearly 57%, was nothing short of a golden goose.

Steel mills, textile factories, and other burgeoning industries in the Northeast and Midwest rallied around McKinley’s tariffs like moths to a flame. To these sectors, tariffs weren’t just protection—they were profit. Shielded from cheaper imports, American manufacturers could dominate the domestic market, setting prices without fear of undercutting by foreign competitors. Andrew Carnegie’s steel empire, for instance, thrived under this artificial insulation, while industries from shoes to sugar celebrated the government-induced scarcity of imports.

Tariffs were sold as a way to protect American jobs, and to a certain extent, they delivered. With foreign competition diminished, factories expanded, and urban workers, especially in industrial strongholds like Pittsburgh and Chicago, found themselves in demand. While many labor unions remained skeptical of their employers’ windfall profits, they cautiously embraced the idea that tariffs might bolster their job security—at least in the short term.

For the Republican Party, tariffs weren’t just an economic tool; they were a cornerstone of their platform. The Northeast, where the industrial economy was most concentrated, became a bastion of pro-tariff sentiment. McKinley himself personified this alliance of protectionism and political power, using tariffs as a rallying cry for a burgeoning industrial America.

But not everyone was so enamored with McKinley’s protectionist fervor. For every steel magnate cheering the Dingley Tariff, there was a farmer cursing it, a free trader decrying its inefficiencies, or a Southern Democrat vowing revenge at the ballot box.

Perhaps the most vocal critics of McKinley’s tariffs were farmers, particularly in the South and West. While urban factories thrived behind tariff walls, rural economies bore the brunt of the fallout. American agricultural products—wheat, cotton, and pork, among others—relied on exports to foreign markets. But retaliatory tariffs from countries like Germany and Britain meant American farmers faced shrinking demand and lower prices abroad. For a Kansas wheat farmer or a Mississippi cotton planter, McKinley’s tariffs weren’t a safeguard; they were a death sentence.

The Democratic Party, long a bastion of free trade ideology, positioned itself as the champion of the agrarian economy. Leaders like William Jennings Bryan framed McKinley’s tariffs as a giveaway to the Northeast industrial elite at the expense of rural America. They argued that high tariffs inflated prices for everyday goods, hitting farmers and small-town consumers hardest.

The intellectual opposition to tariffs was just as fierce as the political one. Classical economists, who adhered to the Ricardian principles of comparative advantage, argued that tariffs distorted markets, fostered inefficiency, and ultimately harmed consumers. Their criticism wasn’t just academic; it was visceral. By insulating American industry, tariffs shielded it from the pressures that drive innovation and productivity. To these critics, McKinley’s policy was economic heresy disguised as patriotism.

While the battle over tariffs often seemed binary, many groups found themselves caught in the middle, benefiting from some aspects of the policy while suffering from others.

Small manufacturers outside the industrial hubs of the Northeast had mixed feelings about McKinley’s tariffs. On one hand, they appreciated the protection against cheaper imports. On the other hand, they struggled to compete with larger domestic firms that could leverage economies of scale under the same tariff umbrella.

While urban workers might have enjoyed better job security, they were also consumers, and tariffs raised the prices of goods. From sugar to clothing, everyday essentials became more expensive under McKinley’s protectionist regime, forcing even some beneficiaries of tariffs to question their broader economic impact.

The Domestic & International Impact of McKinley's Tariff Policy

If you were a steel magnate or textile manufacturer in Pittsburgh or New England, the Dingley Tariff was a godsend. By raising average duties on imports to nearly 57%, McKinley effectively priced foreign competitors out of the U.S. market. Domestic factories roared to life, and industrial profits surged. The tariff served as a subsidy in disguise, granting American manufacturers room to expand without fear of being undercut.

However, for everyday Americans, the story was more mixed. Yes, the factories reopened, and jobs returned to industrial cities. But these gains came at a cost: higher prices for goods. Imported items like sugar and wool became more expensive overnight, and domestic producers raised their prices in lockstep. The working class found themselves squeezed—earning slightly higher wages but paying more for staples.

Abroad, McKinley’s tariffs sparked outrage. European nations, particularly those reliant on exporting to the U.S., retaliated with tariffs of their own. American farmers, who depended on selling wheat and cotton to Europe, were the immediate casualties. Exports plummeted, and rural economies sank deeper into despair. What McKinley framed as a policy for the working man often felt like a knife in the back to farmers in Kansas and Mississippi.

Over the next decade, the U.S. solidified its position as an industrial powerhouse. McKinley’s tariffs provided the breathing room that manufacturers needed to grow, innovate, and consolidate. Cities like Chicago and Detroit swelled with workers, and America’s industrial base became the envy of the world.

But this success came with a cost. Shielded from foreign competition, some industries grew complacent. While they thrived in protected domestic markets, many failed to innovate at the pace of their European rivals. By the time global competition reasserted itself in the 20th century, these industries found themselves vulnerable.

McKinley’s policies didn’t just affect America; they reshaped global trade dynamics. European nations, already grappling with their own protectionist instincts, doubled down on tariffs. Trade wars ensued, constraining the flow of goods and capital across borders. For many historians, the Dingley Tariff represents an early chapter in a broader story of fractured globalization—a precursor to the trade conflicts of the 1930s.

Domestically, the tariffs deepened regional and class divides. The industrial Northeast and Midwest thrived, while the agrarian South and West languished. This economic split fed into political polarization, with Republicans becoming the party of protectionist industrialists and Democrats rallying the free trade, agrarian base. These divisions foreshadowed the populist movements that would define early 20th-century American politics, including the rise of William Jennings Bryan and the eventual push for progressive economic reforms.

One of the most profound long-term effects of McKinley’s tariffs was their role in reshaping how the U.S. government funded itself. High tariffs filled federal coffers during McKinley’s era, but the reliance on import duties disproportionately burdened consumers and farmers. Over time, this inequity fueled calls for reform, culminating in the ratification of the 16th Amendment in 1913, which introduced the federal income tax. Tariffs, once a cornerstone of government revenue, began to recede in importance.

US Tariff Policy Post-McKinley

When President William McKinley was assassinated in 1901, his signature economic policy—high protective tariffs—did not perish with him. In fact, the legacy of McKinley’s tariffs outlived his presidency, shaping American trade policy for decades to come. But the trajectory wasn’t as straightforward as McKinley might have imagined. Under his successor, Theodore Roosevelt, tariffs became entangled with the emerging politics of progressivism, corporate regulation, and a changing global economy.

What happened to McKinley’s tariff system in the years following his death? It was alternately embraced, adapted, and challenged, ultimately setting the stage for the economic upheavals of the 20th century.

When Theodore Roosevelt assumed the presidency, he inherited McKinley’s Dingley Tariff Act, which had raised duties to historic levels. Roosevelt, though more progressive than McKinley, saw little need to challenge the status quo in his early years. The tariffs remained firmly in place, continuing to shield American industries from foreign competition.

In this period, McKinley’s protectionism remained popular among industrialists and Republican politicians, who saw it as essential to America’s growing economic dominance. Roosevelt, focused on trust-busting and labor issues, largely left the tariff system untouched. But cracks in the consensus were beginning to form.

As Roosevelt’s presidency advanced, and particularly under his successor William Howard Taft, the protective tariff became a flashpoint for political and economic debate. The industrial prosperity that McKinley’s tariffs had supported was increasingly viewed as benefiting a narrow segment of the population—wealthy industrialists and large corporations—at the expense of farmers and consumers.

The Progressive movement, which gained momentum in the early 20th century, began to question whether high tariffs were compatible with broader reforms. Critics argued that tariffs artificially inflated prices for everyday goods, putting a disproportionate burden on working-class families. This criticism wasn’t new—farmers had been complaining about tariffs since McKinley’s era—but the growing urban middle class began to share their skepticism.

The tipping point came in 1909, during the presidency of William Howard Taft, with the passage of the Payne-Aldrich Tariff Act. Designed as a compromise, the act attempted to revise McKinley’s high tariffs downward. What emerged was a muddled and deeply unpopular policy. While some duties were lowered, others remained stubbornly high, sparking outrage from progressives who felt Taft had betrayed their trust.

The Payne-Aldrich Tariff highlighted the growing divide within the Republican Party between its conservative, pro-business wing and its progressive reformers. This division would ultimately lead to a political rupture, with Theodore Roosevelt launching his Bull Moose Party in 1912, fracturing Republican dominance.

The real dismantling of McKinley’s tariff legacy came under Woodrow Wilson, a Democrat elected in 1912 on a platform of progressive reform. Wilson and the Democratic Party viewed high tariffs as a relic of the Gilded Age, emblematic of corporate greed and economic inequality.

In 1913, Wilson signed the Underwood Tariff Act, which dramatically reduced duties on imported goods. This marked a decisive shift away from McKinley’s protectionist policies. The Underwood Tariff also introduced an innovation that would fundamentally reshape American fiscal policy: the federal income tax. With the ratification of the 16th Amendment that same year, the U.S. government found a new revenue stream, reducing its reliance on tariffs.

The Underwood Tariff wasn’t just about economics; it was symbolic. It signaled a new era in American politics, one that prioritized free trade, consumer interests, and income redistribution over industrial protectionism.

The Legacy of McKinley's Tariff Policies

McKinley’s tariff policies may have been undermined in the Wilson era, but their influence lingered. The protectionist ethos he championed resurfaced repeatedly throughout the 20th century.

1. The 1920s and the Fordney-McCumber Tariff:

After World War I, Republican administrations returned to protectionist policies. The Fordney-McCumber Tariff of 1922 raised duties to levels reminiscent of McKinley’s era, reflecting a renewed focus on industrial growth and self-sufficiency.

McKinley’s legacy took a darker turn with the Smoot-Hawley Tariff Act of 1930, legislation Its aim was to protect American farmers and manufacturers from foreign competition during the Great Depression by raising import duties on over 20,000 goods. Instead, it deepened the economic downturn both domestically and globally. While McKinley had used tariffs to stabilize a growing economy, Smoot-Hawley exacerbated an economic collapse, sparking retaliatory trade wars and deepening global recession at a time when Americans, from farms to factories, were already struggling.

By the mid-20th century, America had moved decisively away from McKinley-style protectionism. The post-World War II era, the Postwar Consensus, saw the U.S. embrace free trade through institutions like the General Agreement on Tariffs and Trade (GATT) and later the World Trade Organization (WTO). But even in this globalized age, echoes of McKinley’s policies persisted, particularly in debates over industries like steel and automotive manufacturing.

The story of McKinley’s tariffs, and what happened to them after his death, serves as a reminder that trade policy is never static. It evolves with political, economic, and social pressures, oscillating between protectionism and liberalization.

Today’s debates over tariffs—whether aimed at protecting American jobs from Chinese imports or safeguarding national security in critical industries—bear striking similarities to McKinley’s era. His policies, though dismantled in the years after his assassination, remain a touchstone for anyone seeking to understand the push and pull of protectionism in a global economy.

William McKinley’s tariffs were not the end of a debate; they were the beginning of one. His policies set the stage for a century of trade wars, political realignments, and evolving economic priorities.

In the years after his death, America wrestled with the question that McKinley’s tariffs posed but never fully answered: How do you balance the needs of domestic industry with the demands of a global economy? It’s a question we’re still asking today—and one that ensures McKinley’s shadow will loom over trade policy for generations to come.

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