03:57 - Source: CNN
What in the World: Trump's Tariff Tussle

Editor’s Note: CNN national security analyst John Kirby, a retired rear admiral in the US Navy, was a spokesman for both the State and Defense departments in the Obama administration. The opinions expressed in this commentary are his.

CNN  — 

When President Trump announced new tariffs on steel and aluminum earlier this month, he launched a vigorous debate over the value of protectionist policies. It was, in fact, the revival of a debate that runs through American history – and it turns out that the 45th president may have a lot to learn from the experience of the 25th.

In making his announcement, Trump cited President William McKinley, who had a long record as a staunch protectionist.

You don’t find McKinley cited very often on much of anything. The Library of Congress does have film of McKinley talking about trade in his final speech, given the day before his assassination in Buffalo, New York, but the film is so old, dating back to 1901, that there wasn’t any sound recorded.

William McKinley, the 25th President of the United States, who served from 1897 to 1901.

I wanted to learn more about McKinley and about how he fits into this whole trade discussion. As Harry Truman once said, “The only thing new in the world is the history you don’t know.”

So, I went straight to an expert who would know: Robert W. Merry. Merry is an accomplished author and the editor of The American Conservative. Last fall, he published a new biography of McKinley, entitled “President McKinley: Architect of the American Century.” (Spoiler alert: it’s a great read.)

Merry was kind enough to answer my questions. In short, he told me that sometimes protectionist policies are exactly what America has needed. Other times, well, not so much. To everything there is a season. And McKinley’s experience with tariffs is a vivid illustration of exactly that.

Here is our full exchange over email:

John Kirby: The United States has had a fluctuating interest in protectionism for much of our history, swaying back and forth with the political winds. Has protectionism proven effective at times? And if so, under what sorts of circumstances?

Robert Merry: The reality is that America has had times of great prosperity under both free trade and protectionist policies and also has had times of economic difficulty under both free trade and protectionist policies. It depends on the economic context and also on the nature of the policies.

Robert Merry

Obviously, the Smoot-Hawley tariffs of 1930 were a disaster, placing very high duties (about 20% higher) on some 20,000 imported goods. Alexander Hamilton’s tariffs, the country’s first, placed duties of only about 8% on average. But under the Tariff of 1828 – better known as the “Tariff of Abominations” – enacted in the John Quincy Adams administration, rates went up by an average of about 50%. That was obviously too high.

So beware of the ideological approach that suggests all tariffs are bad, all free trade is good, or that protectionism per se is either bad or good.

JK: President Trump cited President McKinley when he announced his new tariff policy. As you detail in your new biography of him, McKinley had been for much of his political career a staunch protectionist, helping write into law significant duties on woolens, cotton products, iron, steel and metal products. He also placed duties for the first time on agricultural products.

Did those tariffs have the desired effect?

RM: The Republican Party was the protectionist party, as was the forerunner Whig Party and the Whigs’ forerunner Federalists. Henry Clay was a protectionist, as was Lincoln.

The protectionist regimen of the post-Civil War years certainly didn’t hamper US economic growth, which exploded upon the domestic scene with the advent of industrialization. America was a vast market, and the country was generating amazing manufacturing and agricultural output to serve that market.

In such a context, there is merit in erecting some barriers to keep out cheap competition. It may have increased prices a bit, but everyone was benefiting from the rapid economic growth.

JK: Later, as President, McKinley softened his stance on tariffs, arguing in a speech — the day before he was assassinated in 1901 — that the “period of exclusiveness is past. … Commercial wars are unprofitable. A policy of good will and friendly trade relations will prevent reprisals.”

What caused McKinley to change his views, and how did he reconcile that? What new approach did he advocate?

RM: McKinley understood that America’s industrial and agricultural productivity was beginning to outpace the domestic market. He saw the prospect of more goods flowing out than there were buyers on the domestic scene. Hence it would be necessary for America to sell its products overseas.

He was smart enough to see that, in this context, the free trade arguments made much greater sense. If you want to sell something, you have to buy from overseas in order to generate the foreign wherewithal that would allow those foreigners to buy US products. And you can’t have this smooth exchange of goods and money if you erect big trade barriers. So, McKinley changed his tune.

JK: Could we learn something — or even apply something today — from McKinley’s idea of “reciprocity” as the US considers the effects of the tariffs President Trump prepares to enforce? Is it still relevant?

RM: It’s fitting that you ask about “reciprocity” because this was at the heart of McKinley’s new outlook. He wasn’t going to reduce US trade barriers unless our trading partners did likewise. So, he pushed for legislation allowing him to negotiate bilateral deals with other countries based on the idea that if you reduce barriers so will we.

Congress gave him the authority, but it was somewhat restricted. Nevertheless, McKinley pursued those negotiations aggressively, and set out to explain the whole thing to the American people. But he was killed before his new international trade sensibility could take root in the American consciousness.

JK: As you note, McKinley pursued — and then reinforced — tariffs by way of legislation. Any president, of course, has wide leeway to enact trade policy without going through Congress. Are there advantages to the way McKinley did it, and if so, what are they?

RM: In McKinley’s day and before, trade policy and tariff rates were very much a matter for Congress to decide. Even when McKinley negotiated a bilateral trade agreement under the reciprocity concept, it had to be approved by Congress.

Trade policy in the years leading up to the Civil War was in total stalemate because Congress couldn’t get any consensus bill through both houses. Hence, the James Polk free trade regimen prevailed.

It wasn’t until Southern free traders left the Union and the government needed revenue to prosecute the war that the stalemate was broken in favor of high tariffs (as well as an income tax that was later ruled unconstitutional by the Supreme Court).

JK: Trade policy aside, you write in your new book, “President McKinley,” about McKinley’s quiet, methodical and even self-effacing manner – that he “always managed to shepherd the flock where he wanted it to go.” He has been eclipsed in the public imagination by his more boisterous successor, Theodore Roosevelt, who, unlike McKinley, gloried in the personal attention and limelight of the White House.

What should Americans most know and appreciate about McKinley’s stewardship of the Oval Office? What have we forgotten about his impact on modern history?

RM: McKinley was not a man of vision and didn’t possess a particularly imaginative intellect. But he was a master manager who could see unfolding events with clarity and could assess not only where they were taking the country but also how they could be manipulated to direct the country in the desired direction. Also, he was a very subtle but effective manipulator of people, a trait he exercised with great deftness and effectiveness.

And so, while he didn’t come into office with a grand vision of American greatness, McKinley harbored a conviction of American greatness and, when he saw how events were unfolding, he deflected them in the desired direction.

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    The result was the annexation of Hawaii; the war with Spain; the acquisition of Puerto Rico, Guam, and the Philippines; America’s complete dominance of the Caribbean for the first time; the “Open Door” to China; the advent of the “special relationship” with Britain; the high tariff policy coupled with reciprocity; the actions leading to the Panama Canal; the ongoing buildup of the Navy; the acquisition of coaling stations around the world; and more.

    He was a very consequential president, and he did more to move America into the 20th century than TR did. But TR never shared credit with anybody, and his biographers tended to paint McKinley as a kind of cipher. That view stuck, unfortunately. I say “unfortunately” because that view was and remains false.