Echoes of Independence: Protectionism was America's past. Will it also be its future?

The "shot heard around the world" is fading into history. A "shout" is instead heard – loud and clear.

It's hard to imagine President Donald Trump didn't have Independence Day in mind when he unveiled what he calls "Liberation Day Tariffs." With the clock ticking, it's not certain what the future holds for the president after July 9 when his 90-day pause expires.

If Trump wishes to better understand the role of tariffs – whether as tools to level the playing field, fund government operations, or strengthen bargaining power – he needs to look no further than the trials faced by the founding fathers. From the very beginning, tariffs have stood at the heart of U.S. economic policy. Yet for all their strategic and fiscal utility, they have also proven to be a double-edged sword, frequently stirring political tensions and, at times, igniting outright conflicts.

The new republic's very first major piece of legislation was the Tariff Act of 1789 which George Washington signed into law on July 4. It focused primarily on creating revenue for the cash-strapped federal government when it was facing a huge pile of war debt. As James Madison wrote to Thomas Jefferson, "Most of our political evils may be traced to our commercial ones."

Despite George Washington's signature, the act's modest duties – a delicate truce between the North's industrial hopes and the South's agrarian priorities – and the act's faint nod to domestic manufacturing, fell short of his Treasury Secretary Alexander Hamilton's design for a bolder, more protective trade policy. The Federalist Paper's key author decided to pour out his ambition in ink again.

Hamilton summed up his vision in the Report on Manufactures (1791). Tariffs, in his view, served a dual purpose: a much-needed income source for the new nation and economic guidance that incentivizes key sectors. Hamilton argued that tariffs, together with government subsidies, should shield fledgling domestic manufacturers from overwhelming foreign competition, particularly from far more established European rivals, until they could stand on their own feet.

Hamilton's Report on Manufactures failed to generate the same support in Congress as his earlier financial plans. Most of its actions were shelved, except for a proposed tariff increase which the lawmakers agreed to raise modestly. His expansive interpretation of constitutional powers to justify federal subsidies alarmed both James Madison and Thomas Jefferson, who viewed it as a threat to states' rights. Jefferson warned Washington that Hamilton's vision was "adverse to liberty."

Jefferson, an agrarian idealist, held shifting views on free trade that ultimately turned more conservative. In his 1793 Report on Commerce to Congress, the first U.S. secretary of state outlined the extensive trade restrictions imposed on the fledgling nation by foreign powers. His proposed reciprocal tariffs as remedy – a strategy Mr. Trump must endorse. Britain, America's largest trading partner at the time, was Jefferson's primary target.

Jefferson's recommendations gained no more traction in Congress than Hamilton's Report, yet his anti-British sentiment left a lasting mark on U.S. policy. Despite their differences, Jefferson's distrust of Britain and Hamilton's protectionism would jointly shape the nation's uncertain path into the 19th century.

Under Jefferson's administration, the shadow of imperial conflict returned. As Napoleon battled Britain, American calls for neutrality were lost across the Atlantic. U.S. ships became targets, caught in the crossfire of British and French blockades. Tensions with Britain were fueled by lingering trade restrictions and the British practice of impressment – forcing American sailors from intercepted ships into Royal Navy service. In 1812, Jefferson's successor, Madison, declared war on Britain amid the chants for "free trade and sailors' rights."

Though the War of 1812 formally ended on February 17, 1815, tensions endured in the economic realm. Britain made little effort to conceal its intent to undermine the emerging American industry, prompting Congress to pass the Tariff Act of 1816, championed by House Speaker Henry Clay. Departing from the revenue-focused Tariff of 1789 and aimed to protect domestic manufacturing, the 1816 act set the precedent for protective tariffs in American history.

Like Hamilton, Clay saw tariffs not as an end but as part of a broader economic strategy. Building on Hamilton's protectionist foundation, he envisioned a strong domestic market supported by what he termed a "genuine American System" – a comprehensive plan of protective tariffs, internal improvements, and a national bank. In a notable 1824 address to the House, Clay outlined this vision in terms that might resonate with Trump:

"(Stimulate domestic industries) should be a prominent object with wise legislators, to multiply the vocations and extend the business of society, as far as it can be done, by the protection of our interests at home, against the injurious effects of foreign legislation."

Clay achieved a success with the Tariff Act of 1824, a pivotal step in advancing his American System. By raising duties on iron, wool, cotton goods and hemp, the act aimed to strengthen Northern industries. Its narrow passage in both the House and Senate had brought deepening sectional tensions between the industrial, pro-tariff North and the slaveholding, free-trade South under the limelight. The tensions would soon shape future economic conflicts, and the fate of the country.

The sectional divide came to a head with the Tariff Act of 1828, which raised import duties up to 50 percent, diverting demand from cheap British goods to domestic products. Backed by manufacturers in the Middle and Northeast and farmers in the West, the tariff provoked fierce opposition from Southern cotton planters, particularly in South Carolina who depended heavily on trade with Britain. They condemned it as the "Tariff of Abominations," fearing retaliatory tariffs on American cotton exports.

South Carolina's outrage peaked in 1832 when a revised tariff offered only modest relief from the 1828 act. In response, the state passed an "Ordinance of Nullification," declaring both tariffs "null, void, and no law," and threatened secession if the federal government attempted to enforce them.

However, South Carolina found itself isolated, and the crisis ended when President Andrew Jackson threatened military action. Though resolved, the "Nullification Crisis" left lasting scars. It made clear to the South that they were at a disadvantage to the Northern majority in Congress – a reality that would resurface with greater force in the lead-up to the Civil War.

Since its founding, the U.S. trade policy has leaned heavily toward protectionism, a stance that persisted until after World War II. Though contemporaries of free trade advocate Adam Smith, Hamilton and Jefferson adopted protectionist measures in response to the mercantilist world of their time. But they still recognized the potential benefits of a well-regulated global free trade system.

In his 1793 report, Jefferson also wrote, "Instead of embarrassing commerce under piles of regulating laws, duties, and prohibitions, could it be relieved from all its shackles in all parts of the world, could every country be employed in producing that which nature has best fitted it to produce, and each be free to exchange with others mutual surplus for mutual wants, the greatest mass possible would then be produced of those things which contribute to human life and human happiness; the numbers of mankind would be increased, and their condition bettered."

The 21st century is far closer to achieving what appeared to be an unattainable ideal for the founding fathers of the United States in the early 19th century: a world of open markets and free trade. Tariffs, once vital to national revenue, have given way to income taxes, while international commerce now relies on intricate supply chains and financial networks. Though far from flawless, these systems offer more promise through thoughtful reform than retreat or dismantling.

The United States is undergoing another experiment with its trading architecture – one that the founding fathers might find unexpectedly familiar despite the vastly changed world. Whether this path proves wise in today's global landscape is a question of profound importance as the nation approaches its 250th anniversary.

(Cover Photo: A late 19th century wood engraving print showing a man on a flagpole replacing the British flag with an American flag as the British fleet departs New York Harbor on November 25, 1783. CFP)