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Tariff

A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and policy that taxes foreign products to encourage or safeguard domestic industry. Protective tariffs are among the most widely used instruments of protectionism, along with import quotas and export quotas and other non-tariff barriers to trade.

Tariffs can be fixed (a constant sum per unit of imported goods or a percentage of the price) or variable (the amount varies according to the price). Taxing imports means people are less likely to buy them as they become more expensive. The intention is that they buy local products instead, boosting their country's economy. Tariffs therefore provide an incentive to develop production and replace imports with domestic products. Tariffs are meant to reduce pressure from foreign competition and reduce the trade deficit. They have historically been justified as a means to protect infant industries and to allow import substitution industrialisation. Tariffs may also be used to rectify artificially low prices for certain imported goods, due to 'dumping', export subsidies or currency manipulation.

There is near unanimous consensus among economists that tariffs have a negative effect on economic growth and economic welfare, while free trade and the reduction of trade barriers has a positive effect on economic growth. Although trade liberalisation can sometimes result in large and unequally distributed losses and gains, and can, in the short run, cause significant economic dislocation of workers in import-competing sectors, free trade has advantages of lowering costs of goods and services for both producers and consumers.

Etymology
The English term tariff derives from the tarif which is itself a descendant of the tariffa which derives from tariffe. This term was introduced to the Latin-speaking world through contact with the Turks and derives from the تعرفه. This Turkish term is a loanword of the. The Persian term derives from تعريف which is the verbal noun of عرف.

Ancient Greece
In the city state of Athens, the port of Piraeus enforced a system of levies to raise taxes for the Athenian government. Grain was a key commodity that was imported through the port, and Piraeus was one of the main ports in the east Mediterranean. A levy of two percent was placed on goods arriving in the market through the docks of Piraeus. Despite the Peloponnesian War preceding year 399 BC, Piraeus had documented a tax income of 1,800 in harbor dues. The Athenian government also placed restrictions on the lending of money and transport of grain to only be allowed through the port of Piraeus.

Great Britain
In the 14th century, Edward III (1312–1377) took interventionist measures, such as banning the import of woollen cloth in an attempt to develop local woollen cloth manufacturing. Beginning in 1489, Henry VII took actions such as increasing export duties on raw wool. The Tudor monarchs, especially Henry VIII and Elizabeth I, used protectionism, subsidies, distribution of monopoly rights, government-sponsored industrial espionage and other means of government intervention to develop the wool industry, leading to England became the largest wool-producing nation in the world.

A protectionist turning point in British economic policy came in 1721, when policies to promote manufacturing industries were introduced by Robert Walpole. These included increased tariffs on imported foreign manufactured goods, and export subsidies. These policies were similar to those used by countries such as Japan, Korea and Taiwan after the Second World War. In addition, in its colonies, Great Britain imposed a ban on advanced manufacturing activities that it did not want to see developed. Britain also banned exports from its colonies that competed with its own products at home and abroad, forcing the colonies to leave the most profitable industries in Britain's hands.

In 1800, Britain, with about 10% of Europe's population, supplied 29% of all pig iron produced in Europe, a proportion that had risen to 45% by 1830. Per capita industrial production was even higher: in 1830 it was 250% higher than in the rest of Europe, up from 110% in 1800.

Protectionist policies of industrial promotion continued until the mid-19th century. At the beginning of that century, the average tariff on British manufactured goods was about 50%, the highest of all major European countries. Thus, according to economic historian Paul Bairoch, Britain's technological advance was achieved "behind high and enduring tariff barriers". In 1846, the country's per capita rate of industrialisation was more than twice that of its closest competitors. Even after adopting free trade for most goods, Britain continued to closely regulate trade in strategic capital goods, such as machinery for the mass production of textiles.

Free trade in Britain began in earnest with the repeal of the Corn Laws in 1846, which was equivalent to free trade in grain. The Corn Acts had been passed in 1815 to restrict wheat imports and to guarantee the incomes of British farmers; their repeal devastated Britain's old rural economy, but began to mitigate the effects of the Great Famine in Ireland. Tariffs on many manufactured goods were also abolished. But while liberalism was progressing in Britain, protectionism continued on the European mainland and in the United States.

On June 15, 1903, the Secretary of State for Foreign Affairs, Henry Petty-Fitzmaurice, 5th Marquess of Lansdowne, made a speech in the House of Lords in which he defended fiscal retaliation against countries that applied high tariffs and whose governments subsidised products sold in Britain (known as "premium products", later called "dumping"). The retaliation was to take the form of threats to impose duties in response to goods from that country. Liberal unionists had split from the liberals, who advocated free trade, and this speech marked a turning point in the group's slide toward protectionism. Lansdowne argued that the threat of retaliatory tariffs was similar to gaining respect in a room of gunmen by pointing a big gun (his exact words were "a gun a little bigger than everyone else's"). The "Big Revolver" became a slogan of the time, often used in speeches and cartoons.

In response to the Great Depression, Britain finally abandoned free trade in 1932 and reintroduced tariffs on a large scale, noticing that it had lost its production capacity to protectionist countries like the United States and Weimar Germany.

United States

Before the new Constitution took effect in 1788, the Congress could not levy taxes – it sold land or begged money from the states. The new national government needed revenue and decided to depend upon a tax on imports with the Tariff of 1789. The policy of the U.S. before 1860 was low tariffs "for revenue only" (since duties continued to fund the national government).

The Embargo Act of 1807 was passed by the U.S. Congress in that year in response to British aggression. While not a tariff per se, the Act prohibited the import of all kinds of manufactured imports, resulting in a huge drop in US trade and protests from all regions of the country. However, the embargo also had the effect of launching new, emerging US domestic industries across the board, particularly the textile industry, and marked the beginning of the manufacturing system in the United States.

An attempt at imposing a high tariff was attempted in 1828, but the South denounced it as a "Tariff of Abominations" and it almost caused a rebellion in South Carolina until it was lowered.

Between 1816 and the end of the Second World War, the United States had one of the highest average tariff rates on manufactured imports in the world. According to Paul Bairoch, the United States was "the homeland and bastion of modern protectionism"during this period

Many American intellectuals and politicians during the country's catching-up period felt that the free trade theory advocated by British classical economists was not suited to their country. They argued that the country should develop manufacturing industries and use government protection and subsidies for this purpose, as Britain had done before them. Many of the great American economists of the time, until the last quarter of the 19th century, were strong advocates of industrial protection: Daniel Raymond who influenced Friedrich List, Mathew Carey and his son Henry, who was one of Lincoln's economic advisers. The intellectual leader of this movement was Alexander Hamilton, the first Secretary of the Treasury of the United States (1789–95). Thus, it was against David Ricardo's theory of comparative advantage that the United States protected its industry. They pursued a protectionist policy from the beginning of the 19th century until the middle of the 20th century, after the Second World War.

In Report on Manufactures, considered the first text to express modern protectionist theory, Alexander Hamilton argued that if a country wished to develop a new activity on its soil, it would have to temporarily protect it. According to him, this protection against foreign producers could take the form of import duties or, in rare cases, prohibition of imports. He called for customs barriers to allow American industrial development and to help protect infant industries, including bounties (subsidies) derived in part from those tariffs. He also believed that duties on raw materials should be generally low. Hamilton argued that despite an initial "increase of price" caused by regulations that control foreign competition, once a "domestic manufacture has attained to perfection… it invariably becomes cheaper. He believed that political independence was predicated upon economic independence. Increasing the domestic supply of manufactured goods, particularly war materials, was seen as an issue of national security. And he feared that Britain's policy towards the colonies would condemn the United States to be only producers of agricultural products and raw materials.

Britain initially did not want to industrialise the American colonies, and implemented policies to that effect (for example, banning high value-added manufacturing activities). Under British rule, America was denied the use of tariffs to protect its new industries. This explains why, after independence, the Tariff Act of 1789 was the second bill of the Republic signed by President Washington allowing Congress to impose a fixed tariff of 5% on all imports, with a few exceptions.

The Congress passed a tariff act (1789), imposing a 5% flat rate tariff on all imports. Between 1792 and the war with Britain in 1812, the average tariff level remained around 12.5%. In 1812 all tariffs were doubled to an average of 25% in order to cope with the increase in public expenditure due to the war. A significant shift in policy occurred in 1816, when a new law was introduced to keep the tariff level close to the wartime level – especially protected were cotton, woolen, and iron goods. The American industrial interests that had blossomed because of the tariff lobbied to keep it, and had it raised to 35 percent in 1816. The public approved, and by 1820, America's average tariff was up to 40 percent.

In the 19th century, statesmen such as Senator Henry Clay continued Hamilton's themes within the Whig Party under the name "American System which consisted of protecting industries and developing infrastructure in explicit opposition to the "British system" of free trade. Before 1860 they were always defeated by the low-tariff Democrats.

From 1846 to 1861, during which American tariffs were lowered but this was followed by a series of recessions and the 1857 panic, which eventually led to higher demands for tariffs than President James Buchanan, signed in 1861 (Morrill Tariff).

During the American Civil War (1861–65), agrarian interests in the South were opposed to any protection, while manufacturing interests in the North wanted to maintain it. The war marked the triumph of the protectionists of the industrial states of the North over the free traders of the South. Abraham Lincoln was a protectionist like Henry Clay of the Whig Party, who advocated the "American system" based on infrastructure development and protectionism. In 1847, he declared: "Give us a protective tariff, and we will have the greatest nation on earth". Once elected, Lincoln raised industrial tariffs and after the war, tariffs remained at or above wartime levels. High tariffs were a policy designed to encourage rapid industrialisation and protect the high American wage rates.

The policy from 1860 to 1933 was usually high protective tariffs (apart from 1913 to 1921). After 1890, the tariff on wool did affect an important industry, but otherwise the tariffs were designed to keep American wages high. The conservative Republican tradition, typified by William McKinley was a high tariff, while the Democrats typically called for a lower tariff to help consumers but they always failed until 1913.

In the early 1860s, Europe and the United States pursued completely different trade policies. The 1860s were a period of growing protectionism in the United States, while the European free trade phase lasted from 1860 to 1892. The tariff average rate on imports of manufactured goods was in 1875 from 40% to 50% in the United States against 9% to 12% in continental Europe at the height of free trade.

In 1896, the Republican Party platform pledged to "renew and emphasize our allegiance to the policy of protection, as the bulwark of American industrial independence, and the foundation of development and prosperity. This true American policy taxes foreign products and encourages home industry. It puts the burden of revenue on foreign goods; it secures the American market for the American producer. It upholds the American standard of wages for the American workingman".

In 1913, following the electoral victory of the Democrats in 1912, there was a significant reduction in the average tariff on manufactured goods from 44% to 25%. However, the First World War rendered this bill ineffective, and new "emergency" tariff legislation was introduced in 1922, after the Republicans returned to power in 1921.

According to economic historian Douglas Irwin, a common myth about United States trade policy is that low tariffs harmed American manufacturers in the early 19th century and then that high tariffs made the United States into a great industrial power in the late 19th century. A review by the Economist of Irwin's 2017 book Clashing over Commerce: A History of US Trade Policy notes: "Political dynamics would lead people to see a link between tariffs and the economic cycle that was not there. A boom would generate enough revenue for tariffs to fall, and when the bust came pressure would build to raise them again. By the time that happened, the economy would be recovering, giving the impression that tariff cuts caused the crash and the reverse generated the recovery. Mr Irwin also methodically debunks the idea that protectionism made America a great industrial power, a notion believed by some to offer lessons for developing countries today. As its share of global manufacturing powered from 23% in 1870 to 36% in 1913, the admittedly high tariffs of the time came with a cost, estimated at around 0.5% of GDP in the mid-1870s. In some industries, they might have sped up development by a few years. But American growth during its protectionist period was more to do with its abundant resources and openness to people and ideas."

The economist Ha-Joon Chang disagrees with the idea that the United States has developed and reached the top of the world economic hierarchy by adopting free trade. On the contrary, according to him, they have adopted an interventionist policy to promote and protect their industries through tariffs. It was their protectionist policy that would have allowed the United States to experience the fastest economic growth in the world throughout the 19th century and into the 1920s.

Tariffs and the Great Depression
Most economists hold the opinion that the Smoot-Hawley Tariff Act in the United States did not greatly worsen the Great Depression:

Paul Krugman writes that protectionism does not lead to recessions. According to him, the decrease in imports (which can be obtained by introducing tariffs) has an expansive effect, that is, it is favourable to growth. Thus, in a trade war, since exports and imports will decrease equally, for everyone, the negative effect of a decrease in exports will be offset by the expansionary effect of a decrease in imports. Therefore, a trade war does not cause a recession. Furthermore, he points out that the Smoot-Hawley tariff did not cause the Great Depression. The decline in trade between 1929 and 1933 "was almost entirely a consequence of the Depression, not a cause. Trade barriers were a response to the Depression, partly as a consequence of deflation."

Milton Friedman held the opinion that the tariffs of 1930 did not cause the Great Depression, instead he blamed the lack of sufficient action on the part of the Federal Reserve. Douglas A. Irwin wrote: "most economists, both liberal and conservative, doubt that Smoot–Hawley played much of a role in the subsequent contraction".

Peter Temin, an economist at the Massachusetts Institute of Technology, explained that a tariff is an expansionary policy, like a devaluation as it diverts demand from foreign to home producers. He noted that exports were 7 percent of GNP in 1929, they fell by 1.5 percent of 1929 GNP in the next two years and the fall was offset by the increase in domestic demand from tariff. He concluded that contrary the popular argument, contractionary effect of the tariff was small.

Jacques Sapir explains that the crisis has other causes than protectionism. He points out that "domestic production in major industrialized countries is declining...faster than international trade is declining." If this decrease (in international trade) had been the cause of the depression that the countries have experienced, we would have seen the opposite". "Finally, the chronology of events does not correspond to the thesis of the free traders... The bulk of the contraction of trade occurred between January 1930 and July 1932, that is, before the introduction of protectionist measures, even self-sufficient, in some countries, with the exception of those applied in the United States in the summer of 1930, but with negative effects. very limited. He noted that "the credit crunch is one of the main causes of the trade crunch." "In fact, international liquidity is the cause of the trade contraction. This liquidity collapsed in 1930 (-35.7%) and 1931 (-26.7%). A study by the National Bureau of Economic Research highlights the predominant influence of currency instability (which led to the international liquidity crisis ) and the sudden rise in transportation costs in the decline of trade during the 1930s.

Calculation of customs duty
Customs duty is calculated on the determination of the 'assess-able value' in case of those items for which the duty is levied ad valorem. This is often the transaction value unless a customs officer determines assess-able value in accordance with the Harmonized System.

Harmonized System of Nomenclature
For the purpose of assessment of customs duty, products are given an identification code that has come to be known as the Harmonized System code. This code was developed by the World Customs Organization based in Brussels. A 'Harmonized System' code may be from four to ten digits. For example, 17.03 is the HS code for molasses from the extraction or refining of sugar. However, within 17.03, the number 17.03.90 stands for "Molasses (Excluding Cane Molasses)".

Customs authority
The national customs authority in each country is responsible for collecting taxes on the import into or export of goods out of the country.

Evasion
Evasion of customs duties takes place mainly in two ways. In one, the trader under-declares the value so that the assessable value is lower than actual. In a similar vein, a trader can evade customs duty by understatement of quantity or volume of the product of trade. A trader may also evade duty by misrepresenting traded goods, categorizing goods as items which attract lower customs duties. The evasion of customs duty may take place with or without the collaboration of customs officials.

Duty-free goods
Many countries allow a traveller to bring goods into the country duty-free. These goods may be bought at ports and airports or sometimes within one country without attracting the usual government taxes and then brought into another country duty-free. Some countries specify 'duty-free allowances' which limit the number or value of duty-free items that one person can bring into the country. These restrictions often apply to tobacco, wine, spirits, cosmetics, gifts and souvenirs.

Deferment of tariffs and duties
Products may sometimes be imported into a free economic zone (or 'free port'), processed there, then re-exported without being subject to tariffs or duties. According to the 1999 Revised Kyoto Convention, a "'free zone' means a part of the territory of a contracting party where any goods introduced are generally regarded, insofar as import duties and taxes are concerned, as being outside the customs territory".

Economic analysis

Neoclassical economic theorists tend to view tariffs as distortions to the free market. Typical analyses find that tariffs tend to benefit domestic producers and government at the expense of consumers, and that the net welfare effects of a tariff on the importing country are negative due to domestic firms not producing more efficiently since there is a lack of external competition. Therefore, domestic consumers are affected since the price is higher due to high costs caused due to inefficient production or if firms aren't able to source cheaper material externally thus reducing the affordability of the products. Normative judgments often follow from these findings, namely that it may be disadvantageous for a country to artificially shield an industry from world markets and that it might be better to allow a collapse to take place. Opposition to all tariff aims to reduce tariffs and to avoid countries discriminating between differing countries when applying tariffs. The diagrams at right show the costs and benefits of imposing a tariff on a good in the domestic economy.

Imposing an import tariff has the following effects, shown in the first diagram in a hypothetical domestic market for televisions:
 * Price rises from world price Pw to higher tariff price Pt.
 * Quantity demanded by domestic consumers falls from C1 to C2, a movement along the demand curve due to higher price.
 * Domestic suppliers are willing to supply Q2 rather than Q1, a movement along the supply curve due to the higher price, so the quantity imported falls from C1−Q1 to C2−Q2.
 * Consumer surplus (the area under the demand curve but above price) shrinks by areas A+B+C+D, as domestic consumers face higher prices and consume lower quantities.
 * Producer surplus (the area above the supply curve but below price) increases by area A, as domestic producers shielded from international competition can sell more of their product at a higher price.
 * Government tax revenue is the import quantity (C2 − Q2) times the tariff price (Pw − Pt), shown as area C.
 * Areas B and D are deadweight losses, surplus formerly captured by consumers that now is lost to all parties.

The overall change in welfare = Change in Consumer Surplus + Change in Producer Surplus + Change in Government Revenue = (−A−B−C−D) + A + C = −B−D. The final state after imposition of the tariff is indicated in the second diagram, with overall welfare reduced by the areas labeled "societal losses", which correspond to areas B and D in the first diagram. The losses to domestic consumers are greater than the combined benefits to domestic producers and government.

That tariffs overall reduce welfare is not a controversial topic among economists. For example, the University of Chicago surveyed about 40 leading economists in March 2018 asking whether "Imposing new U.S. tariffs on steel and aluminum will improve Americans' welfare." About two-thirds strongly disagreed with the statement, while one third disagreed. None agreed or strongly agreed. Several commented that such tariffs would help a few Americans at the expense of many. This is consistent with the explanation provided above, which is that losses to domestic consumers outweigh gains to domestic producers and government, by the amount of deadweight losses.

Tariffs are more inefficient than consumption taxes.

A 2021 study found that across 151 countries over the period 1963–2014, "tariff increases are associated with persistent, economically and statistically significant declines in domestic output and productivity, as well as higher unemployment and inequality, real exchange rate appreciation, and insignificant changes to the trade balance."

Optimal tariff
For economic efficiency, free trade is often the best policy, however levying a tariff is sometimes second best.

A tariff is called an optimal tariff if it is set to maximise the welfare of the country imposing the tariff. It is a tariff derived by the intersection between the trade indifference curve of that country and the offer curve of another country. In this case, the welfare of the other country grows worse simultaneously, thus the policy is a kind of beggar thy neighbor policy. If the offer curve of the other country is a line through the origin point, the original country is in the condition of a small country, so any tariff worsens the welfare of the original country.

It is possible to levy a tariff as a political policy choice, and to consider a theoretical optimum tariff rate. However, imposing an optimal tariff will often lead to the foreign country increasing their tariffs as well, leading to a loss of welfare in both countries. When countries impose tariffs on each other, they will reach a position off the contract curve, meaning that both countries' welfare could be increased by reducing tariffs.

Political analysis
The tariff has been used as a political tool to establish an independent nation; for example, the United States Tariff Act of 1789, signed specifically on July 4, was called the "Second Declaration of Independence" by newspapers because it was intended to be the economic means to achieve the political goal of a sovereign and independent United States.

The political impact of tariffs is judged depending on the political perspective; for example, the 2002 United States steel tariff imposed a 30% tariff on a variety of imported steel products for a period of three years and American steel producers supported the tariff.

Tariffs can emerge as a political issue prior to an election. The Nullification Crisis of 1832 arose from the passage of a new tariff by the United States Congress, a few months before that year's federal elections; the state of South Carolina was outraged by the new tariff, and civil war nearly resulted. In the leadup to the 2007 Australian Federal election, the Australian Labor Party announced it would undertake a review of Australian car tariffs if elected. The Liberal Party made a similar commitment, while independent candidate Nick Xenophon announced his intention to introduce tariff-based legislation as "a matter of urgency".

Unpopular tariffs are known to have ignited social unrest, for example the 1905 meat riots in Chile that developed in protest against tariffs applied to the cattle imports from Argentina.

Protection of infant industry
Postulated in the United States by Alexander Hamilton at the end of the 18th century, by Friedrich List in his 1841 book Das nationale System der politischen Oekonomie and by John Stuart Mill, the argument made in favour of this category of tariffs was this: should a country wish to develop a new economic activity on its soil, it would have to temporarily protect it. In their view, it is legitimate to protect certain activities by customs barriers in order to give them time to grow, to reach a sufficient size and to benefit from economies of scale through increased production and productivity gains. This would allow them to become competitive in order to face international competition. Indeed, a company needs to reach a certain production volume to be profitable in order to compensate for its fixed costs. Without protectionism, foreign products – which are already profitable because of the volume of production already carried out on their soil –  would arrive in the country in large quantities at a lower price than local production. The recipient country's nascent industry would quickly disappear. A firm already established in an industry is more efficient because it is more adapted and has greater production capacity. New firms therefore suffer losses due to a lack of competitiveness linked to their 'apprenticeship' or catch-up period. By being protected from this external competition, firms can therefore establish themselves on their domestic market. As a result, they benefit from greater freedom of manoeuvre and greater certainty regarding their profitability and future development. The protectionist phase is therefore a learning period that would allow the least developed countries to acquire general and technical know-how in the fields of industrial production in order to become competitive on international market.

According to the economists in favour of protecting industries, free trade would condemn developing countries to being nothing more than exporters of raw materials and importers of manufactured goods. The application of the theory of comparative advantage would lead them to specialise in the production of raw materials and extractive products and prevent them from acquiring an industrial base. Protection of infant industries (e.g., through tariffs on imported products) would therefore be essential for developing countries to industrialise and escape their dependence on the production of raw materials.

Economist Ha-Joon Chang argues that most of today's developed countries have developed through policies that are the opposite of free trade and laissez-faire. According to him, when they were developing countries themselves, almost all of them actively used interventionist trade and industrial policies to promote and protect infant industries. Instead, they would have encouraged their domestic industries through tariffs, subsidies and other measures. In his view, Britain and the United States have not reached the top of the global economic hierarchy by adopting free trade. In fact, these two countries would have been among the greatest users of protectionist measures, including tariffs. As for the East Asian countries, he points out that the longest periods of rapid growth in these countries do not coincide with extended phases of free trade, but rather with phases of industrial protection and promotion. Interventionist trade and industrial policies would have played a crucial role in their economic success. These policies would have been similar to those used by Britain in the 18th century and the United States in the 19th century. He considers that infant industry protection policy has generated much better growth performance in the developing world than free trade policies since the 1980s.

In the second half of the 20th century, Nicholas Kaldor takes up similar arguments to allow the conversion of ageing industries. In this case, the aim was to save an activity threatened with extinction by external competition and to safeguard jobs. Protectionism must enable ageing companies to regain their competitiveness in the medium term and, for activities that are due to disappear, it allows the conversion of these activities and jobs.

Protection against dumping
States resorting to protectionism invoke unfair competition or dumping practices:
 * Monetary manipulation: a currency undergoes a devaluation when monetary authorities decide to intervene in the foreign exchange market to lower the value of the currency against other currencies. This makes local products more competitive and imported products more expensive (Marshall Lerner Condition), increasing exports and decreasing imports, and thus improving the trade balance. Countries with a weak currency cause trade imbalances: they have large external surpluses while their competitors have large deficits.
 * Tax dumping: some tax haven states have lower corporate and personal tax rates.
 * Social dumping: when a state reduces social contributions or maintains very low social standards (for example, in China, labour regulations are less restrictive for employers than elsewhere).
 * Environmental dumping: when environmental regulations are less stringent than elsewhere.

Free trade and poverty
Sub-Saharan African countries have a lower income per capita in 2003 than 40 years earlier. Per capita income increased by 37% between 1960 and 1980 and fell by 9% between 1980 and 2000. Africa's manufacturing sector's share of GDP decreased from 12% in 1980 to 11% in 2013. In the 1970s, Africa accounted for more than 3% of world manufacturing output, and now accounts for 1.5%. In an Op ed article for The Guardian (UK), Ha-Joon Chang argues that these downturns are the result of free trade policies, and elsewhere attributes successes in some African countries such as Ethiopia and Rwanda to their abandonment of free trade and adoption of a "developmental state model".

The poor countries that have succeeded in achieving strong and sustainable growth are those that have become mercantilists, not free traders: China, South Korea, Japan, Taiwan. Thus, whereas in the 1990s, China and India had the same GDP per capita, China followed a much more mercantilist policy and now has a GDP per capita three times higher than India's. Indeed, a significant part of China's rise on the international trade scene does not come from the supposed benefits of international competition but from the relocations practiced by companies from developed countries. Dani Rodrik points out that it is the countries that have systematically violated the rules of globalisation that have experienced the strongest growth.

The 'dumping' policies of some countries have also largely affected developing countries. Studies on the effects of free trade show that the gains induced by WTO rules for developing countries are very small. This has reduced the gain for these countries from an estimated US$539 billion in the 2003 LINKAGE model to US$22 billion in the 2005 GTAP model. The 2005 LINKAGE version also reduced gains to 90 billion. As for the "Doha Round", it would have brought in only US$4 billion to developing countries (including China...) according to the GTAP model. However, it has been argued that the models used are actually designed to maximise the positive effects of trade liberalisation, that they are characterised by the absence of taking into account the loss of income caused by the end of tariff barriers.

The turning point of the Great Depression
At the beginning of his career, Keynes was an economist close to Alfred Marshall, deeply convinced of the benefits of free trade. From the crisis of 1929 onwards, noting the commitment of the British authorities to defend the gold parity of the pound sterling and the rigidity of nominal wages, he gradually adhered to protectionist measures.

On 5 November 1929, when heard by the Macmillan Committee to bring the British economy out of the crisis, Keynes indicated that the introduction of tariffs on imports would help to rebalance the trade balance. The committee's report states in a section entitled "import control and export aid", that in an economy where there is not full employment, the introduction of tariffs can improve production and employment. Thus, the reduction of the trade deficit favours the country's growth.

In January 1930, in the Economic Advisory Council, Keynes proposed the introduction of a system of protection to reduce imports. In the autumn of 1930, he proposed a uniform tariff of 10% on all imports and subsidies of the same rate for all exports. In the Treatise on Money, published in the autumn of 1930, he took up the idea of tariffs or other trade restrictions with the aim of reducing the volume of imports and rebalancing the balance of trade.

On 7 March 1931, in the New Statesman and Nation, he wrote an article entitled Proposal for a Tariff Revenue. He pointed out that the reduction of wages led to a reduction in national demand which constrained markets. Instead, he proposes the idea of an expansionary policy combined with a tariff system to neutralise the effects on the balance of trade. The application of customs tariffs seemed to him "unavoidable, whoever the Chancellor of the Exchequer might be". Thus, for Keynes, an economic recovery policy is only fully effective if the trade deficit is eliminated. He proposed a 15% tax on manufactured and semi-manufactured goods and 5% on certain foodstuffs and raw materials, with others needed for exports exempted (wool, cotton).

In 1932, in an article entitled The Pro- and Anti-Tariffs, published in The Listener, he envisaged the protection of farmers and certain sectors such as the automobile and iron and steel industries, considering them indispensable to Britain.

The critique of the theory of comparative advantage
In the post-crisis situation of 1929, Keynes judged the assumptions of the free trade model unrealistic. He criticised, for example, the neoclassical assumption of wage adjustment.

As early as 1930, in a note to the Economic Advisory Council, he doubted the intensity of the gain from specialisation in the case of manufactured goods. While participating in the MacMillan Committee, he admitted that he no longer "believed in a very high degree of national specialisation" and refused to "abandon any industry which is unable, for the moment, to survive". He also criticised the static dimension of the theory of comparative advantage, which, in his view, by fixing comparative advantages definitively, led in practice to a waste of national resources.

In the Daily Mail of 13 March 1931, he called the assumption of perfect sectoral labour mobility "nonsense" since it states that a person made unemployed contributes to a reduction in the wage rate until he finds a job. But for Keynes, this change of job may involve costs (job search, training) and is not always possible. Generally speaking, for Keynes, the assumptions of full employment and automatic return to equilibrium discredit the theory of comparative advantage.

In July 1933, he published an article in the New Statesman and Nation entitled National Self-Sufficiency, in which he criticised the argument of the specialisation of economies, which is the basis of free trade. He thus proposed the search for a certain degree of self-sufficiency. Instead of the specialisation of economies advocated by the Ricardian theory of comparative advantage, he prefers the maintenance of a diversity of activities for nations. In it he refutes the principle of peacemaking trade. His vision of trade became that of a system where foreign capitalists compete for new markets. He defends the idea of producing on national soil when possible and reasonable and expresses sympathy for the advocates of protectionism. He notes in National Self-Sufficiency: A considerable degree of international specialization is necessary in a rational world in all cases where it is dictated by wide differences of climate, natural resources, native aptitudes, level of culture and density of population. But over an increasingly wide range of industrial products, and perhaps of agricultural products also, I have become doubtful whether the economic loss of national self-sufficiency is great enough to outweigh the other advantages of gradually bringing the product and the consumer within the ambit of the same national, economic, and financial organization. Experience accumulates to prove that most modern processes of mass production can be performed in most countries and climates with almost equal efficiency.

He also writes in National Self-Sufficiency: I sympathize, therefore, with those who would minimize, rather than with those who would maximize, economic entanglement among nations. Ideas, knowledge, science, hospitality, travel – these are the things which should have their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national.

Later, Keynes had a written correspondence with James Meade centred on the issue of import restrictions. Keynes and Meade discussed the best choice between quota and tariff. In March 1944 Keynes began a discussion with Marcus Fleming after the latter had written an article entitled Quotas versus depreciation. On this occasion, we see that he has definitely taken a protectionist stance after the Great Depression. He considered that quotas could be more effective than currency depreciation in dealing with external imbalances. Thus, for Keynes, currency depreciation was no longer sufficient and protectionist measures became necessary to avoid trade deficits. To avoid the return of crises due to a self-regulating economic system, it seemed essential to him to regulate trade and stop free trade (deregulation of foreign trade).

He points out that countries that import more than they export weaken their economies. When the trade deficit increases, unemployment rises and GDP slows down. And surplus countries exert a "negative externality" on their trading partners. They get richer at the expense of others and destroy the output of their trading partners. John Maynard Keynes believed that the products of surplus countries should be taxed to avoid trade imbalances. Thus he no longer believes in the theory of comparative advantage (on which free trade is based) which states that the trade deficit does not matter, since trade is mutually beneficial. This also explains his desire to replace the liberalisation of international trade (Free Trade) with a regulatory system aimed at eliminating trade imbalances in his proposals for the Bretton Woods Agreement.

Trade liberalisation can sometimes result in large and unequally distributed losses and gains, and can, in the short run, cause significant economic dislocation of workers in import-competing sectors. "Despite an intuitive understanding of many of the benefits of free trade, the general public has strong reservations about embracing such a policy. One set of reservations concerns distributional effects of trade. Workers are not seen as benefiting from trade. Strong evidence exists indicating a perception that the benefits of trade flow to businesses and the wealthy, rather than to workers, and to those abroad rather than to those in the United States."

Arguments against tariffs
Tariffs do not determine the size of trade deficits: trade balances are driven by consumption. Rather, it is that a strong economy creates rich consumers who in turn create the demand for imports. Industries protected by tariffs expand their domestic market share but an additional effect is that their need to be efficient and cost-effective is reduced. This cost is imposed on (domestic) purchasers of the products of those industries, a cost that is eventually passed on to the end consumer. Finally, other countries must be expected to retaliate by imposing countervailing tariffs, a lose-lose situation that would lead to increased world-wide inflation.

Russia
The Russian Federation adopted more protectionist trade measures in 2013 than any other country, making it the world leader in protectionism. It alone introduced 20% of protectionist measures worldwide and one-third of measures in the G20 countries. Russia's protectionist policies include tariff measures, import restrictions, sanitary measures, and direct subsidies to local companies. For example, the government supported several economic sectors such as agriculture, space, automotive, electronics, chemistry, and energy.

India
From 2017, as part of the promotion of its "Make in India" programme to stimulate and protect domestic manufacturing industry and to combat current account deficits, India has introduced tariffs on several electronic products and "non-essential items". This concerns items imported from countries such as China and South Korea. For example, India's national solar energy programme favours domestic producers by requiring the use of Indian-made solar cells.

Armenia
Armenia, a country located in Western Asia, established its custom service in 1992 after the dissolution of the Soviet Union. When Armenia became a member of the EAEU, it was given access to the Eurasian Customs Union in 2015; this resulted in mostly tariff-free trade with other members and an increased number of import tariffs from outside of the customs union. Armenia does not currently have export taxes. In addition, it does not declare temporary imports duties and credit on government imports or pursuant to other international assistance imports. Upon joining Eurasian Economic Union in 2015, led by Russians, Armenia applied tariffs on its imports at a rate 0–10 percent. This rate has increased over the years, since in 2009 it was around three percent. Moreover, the tariffs increased significantly on agricultural products rather than on non-agricultural products. Armenia has committed to ultimately adopting the EAEU's uniform tariff schedule as part of its EAEU admission. Until 2022, Armenia was authorised to apply non-EAEU tariff rates, according to Decision No. 113. Some beef, pork, poultry, and dairy products; seed potatoes and peas; olives; fresh and dried fruits; some tea items; cereals, especially wheat and rice; starches, vegetable oils, margarine; some prepared food items, such as infant food; pet food; tobacco; glycerol; and gelatin are included in the list. Membership in the EAEU is forcing Armenia to apply stricter standardisation, sanitary, and phytosanitary requirements in line with EAEU – and, by extension, Russian – standards, regulations, and practices. Armenia has had to surrender control over many aspects of its foreign trade regime in the context of EAEU membership. Tariffs have also increased, granting protection to several domestic industries. Armenia is increasingly beholden to comply with EAEU standards and regulations as post-accession transition periods have, or will soon, end. All Armenian goods circulating in the territory of the EAEU must meet EAEU requirements following the end of relevant transition periods.

The Republic of Armenia became a WTO member in 2003, which resulted in the Most Favored Country (MFC) benefits from the organisation. Currently, the tariffs of 2.7% implemented in Armenia are the lowest in the entire framework. The country is also a member of the World Customs Organization (WCO), resulting in a harmonised system for tariff classification.

Switzerland
In 2024, Switzerland abolished tariffs on industrial products imported into the country. The Swiss government estimates the move will have economic benefits of 860 million CHF per year.

Trade liberalisation

 * (GATT)

title: Tariff


text:
Ata

ATA or Ata may refer to:

Computing

 * AT Attachment (ATA/ATAPI), the old name of Parallel ATA, an older interface for computer storage devices
 * Analog telephone adapter, a device for connecting analog telephones to a Voice-over-IP system

Education

 * Ashcroft Technology Academy, Wandsworth, London, England
 * Advanced Technologies Academy, a high school in Las Vegas, Nevada, USA
 * Asia Theological Association
 * Alberta Teachers' Association, Canada
 * Automotive Technician Accreditation, scheme in the UK for vehicle mechanics

Science, technology, and medicine

 * Anti-transglutaminase antibodies, in certain autoimmune diseases
 * Anti-topoisomerase antibodies
 * Anti-thyroglobulin antibodies
 * Allen Telescope Array
 * Atmosphere absolute, a variant of the standard atmosphere (unit)
 * American Telemedicine Association
 * American Thyroid Association
 * ATA chapter numbers
 * Alternating timed automaton
 * ATA, a codon for the amino acid isoleucine

Sports

 * American Taekwondo Association
 * American Tennis Association
 * Amateur Trapshooting Association
 * Archery Trade Association
 * A.T.A. (Greenland)

Organizations

 * Africa Travel Association
 * Air Transport Auxiliary
 * Albanian Telegraphic Agency
 * American Telugu Association
 * American Topical Association, a philatelic organization
 * American Tinnitus Association
 * American Translators Association
 * Association of Talent Agents, Los Angeles, US
 * Associazione Traffico e Ambiente, a transport association in Switzerland
 * Atlantic Treaty Association
 * Aberri Ta Askatasuna, the original name of the Basque organization ETA
 * Artists' Television Access microcinema, San Francisco, US

Places

 * Antarctica's ISO 3166-1 alpha-3 country code
 * Áta, a village in Hungary
 * Ața, a river in Romania
 * ʻAta, Tonga, a depopulated island
 * ʻAtā, Tonga, an island used as an open prison

Transportation

 * ATA Airlines, an American airline operating from 1973 to 2008
 * ATA Holdings, owner of ATA Airlines
 * ATA Airlines (Iran), Tabriz
 * ATA Cruiser, a 1920s aircraft
 * Air Transport Association of America, later Airlines for America
 * Air Transport Auxiliary of the UK RAF
 * American Trucking Associations
 * ATA Carnet, a customs document
 * Comandante FAP Germán Arias Graziani Airport, Anta, Peru, IATA code
 * Hall-Miller Municipal Airport, Atlanta, Cass County, Texas, US, FAA location identifier
 * Station code for Alastua railway station
 * A US Navy hull classification symbol: Auxiliary ocean tug (ATA)

Other uses

 * Ata (name), people with the first name or family name
 * Ata language (disambiguation)
 * Ata Gears, a transmission part producer
 * Atacama skeleton, skeletal remains of a human that were found during 2003 in a deserted Chilean town

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/

title: Ata


text:
UDMA

The Ultra DMA (Ultra Direct Memory Access, UDMA) modes were the fastest method used to transfer data through the ATA hard disk interface, usually between the computer and an ATA device. UDMA succeeded Single/Multiword DMA as the interface of choice between ATA devices and the computer. There are eight different UDMA modes, ranging from 0 to 6 for ATA (0 to 7 for CompactFlash), each with its own timing.

Modes faster than UDMA mode 2 require an 80-conductor cable to reduce data settling times, lower impedance and reduce crosstalk.

title: UDMA


text:
Humphrey–Hawkins Full Employment Act

The Full Employment and Balanced Growth Act (known informally as the Humphrey–Hawkins Full Employment Act) is an act of legislation by the United States government.

Impetus and strategy
Unemployment and inflation levels began to rise in the early 1970s, reviving fears of an economic recession. In the past, the country's economic policy had been defined by the Employment Act of 1946, which encouraged the federal government to pursue "maximum employment, production, and purchasing power" by cooperation with private enterprise. Some Representatives, dissatisfied with the vague wording of this act, sought to create an amendment that would strengthen and clarify the country's economic policy.

The Act's sponsors embraced a form of Keynesian economics, advocating public intervention to increase economic demand and to secure full employment. Economists in the Carter administration, in particular the Council of Economic Advisers, pushed for an inflation target in the bill. The economists made references to the Phillips curve, arguing that there was a trade-off between unemployment and inflation.

Consistent with Keynesian theory, the Act provides for measures to create public jobs to reduce unemployment, as applied during the Great Depression.

The Act also encouraged the government to develop a sound monetary policy, to minimize inflation, and to push toward full employment by managing the amount and liquidity of currency in circulation.

Overall, the Act sought to formalize and expand Congress's role in the economic policy process, as governed by the Federal Reserve and the President.

Overview
In response to rising unemployment levels in the 1970s, Representative Augustus Hawkins and Senator Hubert Humphrey created the Full Employment and Balanced Growth Act. It was signed into law by President Jimmy Carter on October 27, 1978, and codified as 15 USC § 3101. The Act explicitly instructs the nation to strive toward four ultimate goals: full employment, growth in production, price stability, and balance of trade and budget. By explicitly setting requirements and goals for the federal government to attain, the Act is markedly stronger than its predecessor (an alternate view is that the 1946 Act concentrated on employment, and Humphrey–Hawkins, by specifying four competing and possibly inconsistent goals, de-emphasized full employment as the sole primary national economic goal). In brief, the Act:

 * Explicitly states that the federal government will rely primarily on private enterprise to achieve the four goals.
 * Instructs the government to take reasonable means to balance the budget.
 * Instructs the government to establish a balance of trade, i.e., to avoid trade surpluses or deficits.
 * Mandates the Board of Governors of the Federal Reserve to establish a monetary policy that maintains long-run growth, minimizes inflation, and promotes price stability.
 * Instructs the Board of Governors of the Federal Reserve to transmit a Monetary Policy Report to the Congress twice a year outlining its monetary policy.
 * Requires the President to set numerical goals for the economy of the next fiscal year in the Economic Report of the President and to suggest policies that will achieve these goals.
 * Requires the Chairman of the Federal Reserve to connect the monetary policy with the Presidential economic policy.

The Act set specific numerical goals for the President to attain. By 1983, unemployment rates should be not more than 3% for persons aged 20 or over and not more than 4% for persons aged 16 or over, and inflation rates should not be over 4%. By 1988, inflation rates should be 0%. The Act allows Congress to revise these goals over time. (It is worth noting that as of 2017 the Federal Reserve has had a target inflation rate of 2%, not 0%. 0% inflation is not considered ideal and can lead to deflation which can hurt the economy.)

If private enterprise appeared not to be meeting these goals, the Act in its original form, though not in its ultimate iteration, expressly allowed the federal government to create a "reservoir of public employment," provided of course that the legislation to establish the "reservoir" managed to become ratified. These jobs would have been required to be in the lower ranges of skill and pay to minimize competition with the private sector.

The Act directly prohibits discrimination on account of sex, religion, race, age, and national origin in any program created under the Act.

Amendments
The language of the Act was amended twice by riders, attached to unrelated or distantly related legislation.

 * 1) May 10, 1979: Public Law 96-10, attached to H.R. 2283, amended the Act to include federal outlays as a proportion of the gross national product when numerical goals are calculated.
 * 2) November 5, 1990: Public Law 101-508, attached to the Pollution Prevention Act, required the Economic Report to the President to be submitted within 20 days after the start of the session of Congress instead of 10 days after the submission of the annual budget.

title: Humphrey–Hawkins Full Employment Act


text:
Timeline

A New Chart of History color.jpg, Sweden.]] A timeline is a display of a list of events in chronological order. It is typically a graphic design showing a long bar labelled with dates paralleling it, and usually contemporaneous events.
 * Joseph Priestley's A New Chart of History, 1765.]]

Timelines can use any suitable scale representing time, suiting the subject and data; many use a linear scale, in which a unit of distance is equal to a set amount of time. This timescale is dependent on the events in the timeline. A timeline of evolution can be over millions of years, whereas a timeline for the day of the September 11 attacks can take place over minutes, and that of an explosion over milliseconds. While many timelines use a linear timescale—especially where very large or small timespans are relevant -- logarithmic timelines entail a logarithmic scale of time; some "hurry up and wait" chronologies are depicted with zoom lens metaphors.

More usually, "timeline" refers merely to a data set which could be displayed as described above. For example, this meaning is used in the titles of many Wikipedia articles starting "Timeline of ..."

History
Time and space (particularly the line) are intertwined concepts in human thought. The line is ubiquitous in clocks in the form of a circle, time is spoken of in terms of length, intervals, a before and an after. The idea of orderly, segmented time is also represented in almanacs, calendars, charts, graphs, genealogical and evolutionary trees, where the line is central.

Originally, chronological events were arranged in a mostly textual form. This took form in annals, like king lists. Alongside them, the table was used like in the Greek tables of Olympiads and Roman lists of consuls and triumphs. Annals had little narrative and noted what happened to people, making no distinction between natural and human actions.

In Europe, from the 4th century, the dominant chronological notation was the table. This can be partially credited to Eusebius, who laid out the relations between Jewish, pagan, and Christian histories in parallel columns, culminating in the Roman Empire, according to the Christian view when Christ was born to spread salvation as far as possible. His work was widely copied and was among the first printed books. This served the idea of Christian world history and providential time. The table is easy to produce, append, and read with indices, so it also fit the Renaissance scholars' absorption of a wide variety of sources with its focus on commonalities. These uses made the table with years in one column and places of events (kingdoms) on the top the dominant visual structure of time.

By the 17th century, historians had started to claim that chronology and geography were the two sources of precise information which bring order to the chaos of history. In geography, Renaissance mapmakers updated Ptolemy's maps and the map became a symbol of the power of monarchs, and knowledge. Likewise, the idea that a singular chronology of world history from contemporary sources is possible affected historians. The want for precision in chronology gave rise to adding historical eclipses to tables, like in the case of Gerardus Mercator. Various graphical experiments emerged, from fitting the whole of history on a calendar year to series of historical drawings, in the hopes of making a metaphorical map of time. Developments in printing and engraving that made practical larger and more detailed book illustrations allowed these changes, but in the 17th century, the table with some modifications continued to dominate.

The modern timeline emerged in Joseph Priestley's A Chart of Biography, published in 1765. It presented dates simply and provided an analogue for the concept of historical progress that was becoming popular in the 18th century. However, as Priestley recognized, history is not totally linear. The table has the advantage in that it can present many of these intersections and branching paths. For Priestley, its main use was a "mechanical help to the knowledge of history", not as an image of history. Regardless, the timeline had become very popular during the 18th and 19th centuries. Positivism emerged in the 19th century and the development of chronophotography and tree ring analysis made visible time taking place at various speeds. This encouraged people to think that events might be truly objectively recorded.

However, in some cases, filling in a timeline with more data only pushed it towards impracticality. Jacques Barbeu-Duborg's 1753 Chronologie Universelle was mounted on a 54-feet-long (16½ m) scroll. Charles Joseph Minard's 1869 thematic map of casualties of the French army in its Russian campaign put much less focus on the one-directional line. Charles Renouvier's 1876 Uchronie, a branching map of the history of Europe, depicted both the actual course of history and counterfactual paths. At the end of the 19th century, Henri Bergson declared the metaphor of the timeline to be deceiving in Time and Free Will. The question of big history and deep time engendered estranging forms of the timeline, like in Olaf Stapledon's 1930 work Last and First Men where timelines are drawn on scales from the historical to the cosmological. Similar techniques are used by the Long Now Foundation, and the difficulties of chronological representation have been presented by visual artists including Francis Picabia, On Kawara, J. J. Grandville, and Saul Steinberg.

Types
There are different types of timelines:
 * Text timelines, labeled as text
 * Number timelines, the labels are numbers, commonly line graphs
 * Interactive, clickable, zoomable
 * Video timelines

There are many methods to visualize timelines. Historically, timelines were static images and were generally drawn or printed on paper. Timelines relied heavily on graphic design, and the ability of the artist to visualize the data.

Uses
Timelines are often used in education to help students and researchers with understanding the order or chronology of historical events and trends for a subject. To show time on a specific scale on an axis, a timeline can visualize time lapses between events, durations (such as lifetimes or wars), and the simultaneity or the overlap of spans and events.

In historical studies
Timelines are particularly useful for studying history, as they convey a sense of change over time. Wars and social movements are often shown as timelines. Timelines are also useful for biographies. Examples include:

 * Timeline of the civil rights movement
 * Timeline of European exploration
 * Timeline of European imperialism
 * Timeline of Solar System exploration
 * Timeline of United States history
 * Timeline of World War I
 * List of timelines of World War II
 * Timeline of religion

In natural sciences
Timelines are also used in the natural world and sciences, such as in astronomy, biology, chemistry, and geology:

 * 2009 swine flu pandemic timeline
 * Chronology of the universe
 * Geologic time scale
 * Timeline of the evolutionary history of life
 * Timeline of crystallography

In project management
Another type of timeline is used for project management. Timelines help team members know what milestones need to be achieved and under what time schedule. An example is establishing a project timeline in the implementation phase of the life cycle of a computer system.

Software
Timelines (no longer constrained by previous space and functional limitations) are now digital and interactive, generally created with computer software. Microsoft Encarta encyclopedia provided one of the earliest multimedia timelines intended for students and the general public. ChronoZoom is another examplespa of interactive timeline software.

title: Timeline


text:
Tariff of 1789

The Tariff Act of 1789 was the first major piece of legislation passed in the United States after the ratification of the United States Constitution. It had three purposes: to support government, to protect manufacturing industries developing in the nation, and to raise revenue for the federal debt. It was sponsored by Congressman James Madison, passed by the 1st United States Congress, and signed into law by President George Washington. The act levied a 50¢ per ton duty on goods imported by foreign ships; American-owned vessels were charged 6¢ per ton.

In the aftermath of the American Revolution, the weak Congress of the Confederation had been unable to impose a tariff or reach reciprocal trade agreements with most European powers, creating a situation in which the country was unable to prevent a flood of European goods which were damaging domestic manufacturers even while Britain and other countries placed high duties on U.S. goods. The country also faced major debts left over from the Revolutionary War, and needed new sources of funding to maintain financial solvency. One of the major powers granted under the new Constitution was the ability to levy tariffs, and after the 1st Congress was seated, passage of a tariff bill became one of the most pressing issues.

The debates over the purpose of the tariff exposed the sectional interests at stake: Northern manufacturers favored high duties to protect industry; Southern planters desired a low tariff that would foster cheap consumer imports. Ultimately, Madison navigated the tariff to passage, but he was unable to include a provision in the final bill that would have discriminated against British imports. After passing both houses of Congress, President Washington signed the act in law on July 6, 1789 when they used it to pay off the US war debt.

Economic conditions prior to passage
The American Revolution was followed by an economic reorganization, which carried in its wake a period of uncertainty and hard times. During the conflict, labor and investment had been diverted from agriculture and legitimate trade to manufacturing and privateers. Men had gone into occupations that ceased with the end of the war. Lowered prices, resulting from the cessation of war demands, in combination with the importation of the cheaper goods of Europe, were fast ruining such infant manufacturing concerns as had sprung up during the war, some of which were at a comparative disadvantage with the resumption of normal foreign trading relations.

Another factor which made the situation even more distressing was the British Navigation Acts. The only clause in the 1783 Paris peace treaty concerning commerce was a stipulation guaranteeing that the navigation of the Mississippi would be forever free to the United States. John Jay had tried to secure some reciprocal trade provisions with Great Britain but without result. William Pitt, in 1783, introduced a bill into the British Parliament providing for free trade between the United States and the British colonies, but instead of passing the bill, Parliament enacted the British Navigation Act 1783, which admitted only British built and manned ships to the ports of the West Indies, and imposed heavy tonnage dues upon American ships in other British ports. It was amplified in 1786 by another act designed to prevent the fraudulent registration of American vessels and by still another in 1787, which prohibited the importation of American goods by way of foreign islands. The favorable features of the old Navigation Acts that had granted bounties and reserved the English markets in certain cases to colonial products were gone; the unfavorable ones were left. The British market was further curtailed by the depression there after 1783. Although the French treaty of 1778 had promised "perfect equality and reciprocity" in commercial relations, it was found impossible to make a commercial treaty on that basis. Spain demanded, as the price for reciprocal trading relations, a surrender by the United States for 25 years the right of navigating the Mississippi, a price that the New England merchants would have been glad to pay.

France (1778) and the Netherlands (1782) made treaties but not on even terms; Portugal refused all advances. Only Sweden (1783) and Prussia (1785) made treaties guaranteeing reciprocal commercial privileges.

The weakness of the Continental Congress under the Articles of Confederation prevented retaliation by the central government. Congress repeatedly asked for power to regulate commerce, but was refused by the states upon which rested the execution of such commercial treaties as Congress might negotiate. Eventually, the states themselves attempted retaliatory measures, and from 1783 to 1788, New Hampshire, Massachusetts, Rhode Island, New York, Pennsylvania, Maryland, Virginia, North Carolina, South Carolina, and Georgia levied tonnage dues upon British vessels or discriminating tariffs upon British goods. Whatever effect these efforts might have had were neutralized by the fact that the duties varied 0% to 100%, which simply drove British ships to the free or cheapest ports to flood the market with their goods. Commercial war between the states followed and turned futility into chaos.

Adoption of the Constitution meant the elimination of many of the economic ills under which industry and commerce had struggled since the war. A reorganization was essential and the immediate economic results were salutary. Its most important additions to the power of Congress were those relating to finance and commerce: it enabled the federal government to levy taxes, regulate trade, coin money, protect industry, and direct the settlement of the West, and, as later events proved, to establish credit and redeem its securities. Under it, freedom of trade was ensured throughout the young republic.

In the months leading up to the passage of the Tariff Act, Congress received several petitions from different cities representing manufacturing groups asking for relief from the flood of European imported goods.

The United States Congress answered the petitions of these groups for urgent attention, by making the Tariff of 1789 the first major bill to be considered in its first session and passed.

Import duty legislation and American sectional interests
The import fees "represented a compromise between the advocates of a high protective tariff and those who favored a tariff for revenue only [to maintain the central government]." Charges up to fifty percent were imposed on selected manufactured and agricultural goods, including "steel, ships, cordage, tobacco, salt, indigo [and] cloth." On the majority of items subject to duty, a five percent fee was levied, ad valorem. Molasses, an indispensable ingredient for Northeastern rum producers, was lowered from 6¢ per gallon to 2.5¢. James Madison modified the terms of the tariff to balance sectional conflicts but conceded that articles subject to high duties "were pretty generally taxed for the benefit of the manufacturing part of the northern community." He acknowledged the South, the main wealth-producing part of the nation, would inevitably "shoulder a disproportionate share of the financial burden involved in the transforming the United States into a commercial, manufacturing, and maritime power."

Tonnage duty legislation and US foreign relations with European powers
In its final form, the tariff erected "an American navigation system," superseding the individual state sanctioned fees designed to protect domestic shipping during the Articles of Confederation period from 1781 to 1789. The act established tonnage rates favorable to American carriers by charging them lower cargo fees than those imposed on foreign boats importing similar goods. Coastal trade was reserved exclusively for American flag vessels. These provisions were consistent with mercantilist policies practice by European powers at the time. Dating from the Treaty of Paris, ending the War for Independence in 1783, Great Britain had declined to seek a commercial treaty with the United States. In addition, provisions of the treaty had gone unfulfilled, including compensation to slaveholders for slaves emancipated by the British Navy during the War and the failure to abandon military posts in the Northwest Territory. Still, Great Britain remained the dominant trading partner for the United States, the countries reverting to an essentially colonial-era trade relationship. Representative James Madison, presiding over the tariff debates in Congress, attempted to introduce discriminatory provisions into the tonnage legislation that would favor France and its colonial possessions and shift American trade away from Great Britain. To effect this, Madison called for a 60¢ per ton fee upon foreign carriers lacking a commercial agreement with the United States, while France, which possessed a treaty, would be charged tonnage at 30¢. This measure alone "was equivalent to levying economic war" upon Great Britain. Madison's proposals were intended to unify politically the agricultural and manufacturing interests in support of that commercial realignment at the national level, damaging to Great Britain and beneficial to revolutionary France. Many representatives of northern business were wary of abandoning Great Britain as their primary trading partner and merchant marine and questioned whether France could ever act "as the principle supplier and market for the United States." The House of Representatives, nevertheless, initially passed Madison's "controversial" legislation, with the discriminatory provision intact. The Senate, however, removed it from the bill and sent it back to the House, where it was passed, without amendment, 31 to 19, on July 4, 1789. President Washington signed the act into law on July 4, 1789. The final bill extracted concessions from both interests, but delivered a distinct advantage to maritime and manufacturing regions of the country. The Tariff of 1789 placed France and Great Britain on an equal footing with regard to shipping, manufactures, and raw products delivered to American ports. All foreign-owned or foreign-built ships paid 50¢ per ton duty; American-owned vessels were charged 6¢ per ton.

To enable the federal government to collect the import duties, Congress also passed the Collection Act of 1789, which established the United States Customs Service and designated ports of entry. The tariffs established by this and later acts would make up the vast majority of government revenue; more than 87 percent of the federal government's revenue between 1789 and 1800 came from import duties. The tariff would continue to make up the bulk of federal revenue until the 20th century.

Political and sectional responses to the tariff
Madison's attempt to enlist northern merchants and businessmen in supporting an economic contest with Great Britain elicited a cool response. Firstly, British capital and markets contributed to the general prosperity of the North, and secondly, a shift towards France would mean aligning the United States with a revolutionary government that exhibited what Federalist leadership regarded as "an excess of democracy." Alexander Hamilton, soon to enter the executive branch as Secretary of the Treasury, declined to support Madison's proposal and warned that economic warfare with Great Britain would drastically reduce the import duty revenue that the tariff legislation called for, placing at risk the funds anticipated to run the new federal government and finance the national debt.

This dispute between Madison and Hamilton marked "the first important breach" between these two Federalist leaders, which would deepen when Hamilton, as Treasury Secretary, launched his fiscal and economic programs, ending their long collaboration. The legislation produced the first sectional strains within "the Federalist coalition of northern businessmen and southern planters." In the South, "agricultural interests" viewed the high tariff and tonnage rates as a triumph for northern merchants and manufacturers, the burden of which fell on southern staple crop exporters.

This early application of constitutional authority highlighted north-south social and economic differences and presaged the dissolution of the Federalist coalition, the formation of an agrarian alliance, and the rise of the First Party System.

title: Tariff of 1789


text:
National Road

The National Road (also known as the Cumberland Road) was the first major improved highway in the United States built by the federal government. Built between 1811 and 1837, the 620 mi road connected the Potomac and Ohio Rivers and was a main transport path to the West for thousands of settlers. When improved in the 1830s, it became the second U.S. road surfaced with the macadam process pioneered by Scotsman John Loudon McAdam.

Construction began heading west in 1811 at Cumberland, Maryland, on the Potomac River. After the Financial Panic of 1837 and the resulting economic depression, congressional funding ran dry and construction was stopped at Vandalia, Illinois, the then-capital of Illinois, 63 mi northeast of St. Louis across the Mississippi River.

The road has also been referred to as the Cumberland Turnpike, the Cumberland–Brownsville Turnpike (or Road or Pike), the Cumberland Pike, the National Pike, and the National Turnpike.

In the 20th century with the advent of the automobile, the National Road was connected with other historic routes to California under the title, National Old Trails Road. Today, much of the alignment is followed by U.S. Route 40 (US 40), with various portions bearing the Alternate U.S. Route 40 (Alt. US 40) designation, or various state-road numbers (such as Maryland Route 144 for several sections between Baltimore and Cumberland).

In 1976, the American Society of Civil Engineers designated the National Road as a National Historic Civil Engineering Landmark. In 2002, the entire road, including extensions east to Baltimore and west to St. Louis, was designated the Historic National Road, an All-American Road.

Braddock Road
The Braddock Road had been opened by the Ohio Company in 1751 between Fort Cumberland, the limit of navigation on the upper Potomac River, and the French military station at Fort Duquesne at the forks of the Ohio River, (at the confluence of the Allegheny and Monongahela Rivers), an important trading and military point where the city of Pittsburgh now stands. It received its name during the colonial-era French and Indian War of 1753–1763 (also known as the Seven Years' War in Europe), when it was constructed by British General Edward Braddock, who was accompanied by Colonel George Washington of the Virginia militia regiment in the ill-fated July 1755 Braddock expedition, an attempt to assault the French-held Fort Duquesne.

Cumberland Road
Construction of the Cumberland Road (which later became part of the longer National Road) was authorized on March 29, 1806, by Congress. The new Cumberland Road would replace the wagon and foot paths of the Braddock Road for travel between the Potomac and Ohio Rivers, following roughly the same alignment until just east of Uniontown, Pennsylvania. From there, where the Braddock Road turned north towards Pittsburgh, the new National Road/Cumberland Road continued west to Wheeling, Virginia (now West Virginia), also on the Ohio River.

The contract for the construction of the first section was awarded to Henry McKinley on May 8, 1811, and construction began later that year, with the road reaching Wheeling on August 1, 1818. For more than 100 years, a simple granite stone was the only marker of the road's beginning in Cumberland, Maryland. In June 2012, a monument and plaza were built in that town's Riverside Park, next to the historic original starting point.

Beyond the National Road's eastern terminus at Cumberland and toward the Atlantic coast, a series of private toll roads and turnpikes were constructed, connecting the National Road (also known as the Old National Pike) with Baltimore, then the third-largest city in the country, and a major maritime port on Chesapeake Bay. Completed in 1824, these feeder routes formed what is referred to as an eastern extension of the federal National Road.

Westward extension

On May 15, 1820, Congress authorized an extension of the road to St. Louis, on the Mississippi River, and on March 3, 1825, across the Mississippi and to Jefferson City, Missouri. Work on the extension between Wheeling and Zanesville, Ohio, used the pre-existing Zane's Trace of old Ebenezer Zane, and was completed in 1833 to the new state capital of Columbus, Ohio, and in 1838 to the college town of Springfield, Ohio.

In 1849, a bridge was completed to carry the National Road across the Ohio River at Wheeling. The Wheeling Suspension Bridge, designed by Charles Ellet Jr., was at the time the world's longest bridge span at 1010 ft from tower to tower.

Transfer to states
Maintenance costs on the Cumberland Road were becoming more than Congress was willing to bear. In agreements with Maryland, Virginia, and Pennsylvania, the road was to be reconstructed and resurfaced. The section that ran over Haystack Mountain, just west of Cumberland, was abandoned and a new road was built through the Cumberland Narrows.

On April 1, 1835, the section from Wheeling to Cumberland was transferred to Maryland, Pennsylvania, and Virginia (now West Virginia). The last congressional appropriation was made May 25, 1838, and in 1840, Congress voted against completing the unfinished portion of the road, with the deciding vote being cast by Henry Clay. By that time, railroads were proving a better method of long-distance transportation, and the Baltimore and Ohio Railroad was being built west from Baltimore to Cumberland, mostly along the Potomac River, and then by a more direct route than the National Road across the Allegheny Plateau of West Virginia (then Virginia) to Wheeling. Construction of the National Road stopped in 1839. Much of the road through Indiana and Illinois remained unfinished and was transferred to the states.

Federal construction of the road stopped at Vandalia, Illinois, which at that time was the state's capital. Illinois officials decided not to continue construction without the federal funds because two state roads from Vandalia to the St. Louis area, today's US 40 and Illinois Route 140 (known then as the Alton Road), already existed.

Subsequent events
In 1912, the National Road was chosen to become part of the National Old Trails Road, which would extend further east to New York City and west to Los Angeles, California. Five Madonna of the Trail monuments, donated by the Daughters of the American Revolution, were erected along the Old Trails Road.

In 1927, the National Road was designated as the eastern part of US 40, which still generally follows the National Road's alignment with occasional bypasses, realignments, and newer bridges. The mostly parallel Interstate 70 (I-70) now provides a faster route for through travel without the many sharp curves, steep grades, and narrow bridges of US 40 and other segments of the National Road. Heading west from Hancock in western Maryland, I-70 takes a more northerly path to connect with and follow the Pennsylvania Turnpike (also designated as I-76) across the mountains between Breezewood and New Stanton, where I-70 turns west to rejoin the National Road's route (and US 40) near Washington, Pennsylvania.

The more recently constructed I-68 parallels the old road from Hancock through Cumberland west to Keyser's Ridge, Maryland, where the National Road and US 40 turn northwest into Pennsylvania, but I-68 continues directly west to meet I-79 near Morgantown, West Virginia. The portion of I-68 in Maryland is designated as the National Freeway.

Historical structures

Many of the National Road's original stone arch bridges also remain on former alignments, including: Another remaining National Road bridge is the Wheeling Suspension Bridge at Wheeling, West Virginia. Opened in 1849 to carry the road over the Ohio River, it was the largest suspension bridge in the world until 1851, and until 2019 was the oldest vehicular suspension bridge in the United States still in use, although it has since been closed to vehicular traffic due to repeated overweight vehicles ignoring the weight limits and damaging the bridge. A newer bridge now carries the realigned US 40 and I-70 across the river nearby.
 * Casselman River Bridge near Grantsville, Maryland – Built in 1813–1814 to carry the road across the Casselman River, it was the longest single-span stone arch bridge in America at the time.
 * Great Crossings Bridge near Confluence, Pennsylvania—built in 1818 to carry the road over the Youghiogheny River—the bridge, and the adjacent town of Somerfield, Pennsylvania (which was razed) are under the waters of Youghiogheny River Lake (though still visible at times of extremely low water levels).

Three of the road's original toll houses are preserved: Additionally, several Old National Pike Milestones—some well-maintained, others deteriorating, and yet others represented by modern replacements—remain intact along the route.
 * La Vale Tollgate House, in La Vale, Maryland
 * Petersburg Tollhouse, in Addison, Pennsylvania
 * Searights Tollhouse, near Uniontown, Pennsylvania

Route description
In general, the road climbed westwards along the Amerindian trail known as Chief Nemacolin's Path, once followed and improved by a young George Washington, then also followed by the Braddock Expedition. Using the Cumberland Narrows, its first phase of construction crossed the Allegheny Mountains entered southwestern Pennsylvania, reaching the Allegheny Plateau in Somerset County, Pennsylvania. There, travelers could turn off to Pittsburgh or continue west through Uniontown and reach navigable water, the Monongahela River, at Brownsville, Pennsylvania, which was by then a major outfitting center and riverboat-building emporium. Many settlers boarded boats there to travel down the Ohio and up the Missouri, or elsewhere on the Mississippi watershed.

By 1818, travelers could press on, still following Chief Nemacolin's trail across the ford, or taking a ferry to West Brownsville, moving through Washington County, Pennsylvania, and passing into Wheeling, Virginia (now West Virginia), 45 mi away on the Ohio River. Subsequent efforts pushed the road across the states of Ohio and Indiana and into the Illinois Territory. The western terminus of the National Road at its greatest extent was at the Kaskaskia River in Vandalia, Illinois, near the intersection of modern US 51 and US 40.

Today, travelers driving east from Vandalia travel along modern US 40 through south-central Illinois. The National Road continued into Indiana along modern US 40, passing through the cities of Terre Haute and Indianapolis. Within Indianapolis, the National Road used the original alignment of US 40 along West and East Washington Street (modern US 40 is now routed along I-465). East of Indianapolis, the road went through the city of Richmond before entering Ohio, where the road continued along modern US 40 and passed through the northern suburbs of Dayton, Springfield, and Columbus.

West of Zanesville, Ohio, despite US 40's predominantly following the original route, many segments of the original road can still be found. Between Old Washington and Morristown, the original roadbed has been overlaid by I-70. The road then continued east across the Ohio River into Wheeling in West Virginia, the original western end of the National Road when it was first paved. After running 15 mi in West Virginia, the National Road then entered Pennsylvania.

The road cut across southwestern Pennsylvania, heading southeast for about 90 mi before entering Maryland. East of Keyser's Ridge, the road used modern Alt US 40 to the city of Cumberland (modern US 40 is now routed along I-68). Cumberland was the original eastern terminus of the road.

In the mid-19th century, a turnpike extension to Baltimore was approved—along what is now Maryland Route 144 from Cumberland to Hancock, US 40 from Hancock to Hagerstown, Alternate US 40 from Hagerstown to Frederick, and Maryland Route 144 from Frederick to Baltimore. The approval process was a hotly debated subject because of the removal of the original macadam construction that made this road famous.

The road's route between Baltimore and Cumberland continues to use the name National Pike or Baltimore National Pike and as Main Street in Ohio today, with various portions now signed as US 40, Alt. US 40, or Maryland Route 144. A spur between Frederick, Maryland, and Georgetown (Washington, D.C.), now Maryland Route 355, bears various local names, but is sometimes referred to as the Washington National Pike; it is now paralleled by I-270 between the Capital Beltway (I-495) and Frederick.

Millionaires' Row
Nicknamed the "Main Street of America", the road's presence in towns on its route and effective access to surrounding towns attracted wealthy residents to build their houses along the road in towns such as in Richmond, Indiana, and Springfield, Ohio, creating Millionaires' Rows.

Historic designations

In 1976, the American Society of Civil Engineers designated the National Road as a National Historic Civil Engineering Landmark.

There are several structures associated with the National Road that are listed on the National Register of Historic Places. Some are listed below.

Maryland

 * Sixty-nine milestones in Maryland on Maryland Route 144 and Maryland Route 165, U.S. Route 40, U.S. Route 40 Alternate, and U.S. Route 40 Scenic
 * Inns on the National Road in Cumberland, Maryland, and Grantsville, Maryland
 * Casselman River Bridge near Grantsville, Maryland

Pennsylvania
The Pennsylvania Historical and Museum Commission has installed five historical markers noting the historic importance of the road: one in Somerset County on August 10, 1947, one in Washington County on April 1, 1949, and three in Fayette County on October 12, 1948, October 12, 1948, and May 19, 1996.
 * Petersburg Tollhouse in Addison, Pennsylvania
 * Mount Washington Tavern adjacent to the Fort Necessity National Battlefield in Wharton Township, Pennsylvania
 * Searights Tollhouse, National Road, in Uniontown, Pennsylvania
 * Dunlap's Creek Bridge, near Brownsville, Pennsylvania, the first cast iron arch bridge in the United States. Completed in 1839, it was designed by Richard Delafield and built by the United States Army Corps of Engineers. Still in use, the bridge is also a National Historic Civil Engineering Landmark.
 * Claysville S Bridge in Washington County, Pennsylvania, near Claysville, Pennsylvania

West Virginia

 * Mile markers 8, 9, 10, 11, 13, and 14 in West Virginia
 * National Road Corridor Historic District in Wheeling, West Virginia
 * Wheeling Suspension Bridge in Wheeling, West Virginia

Ohio

 * Peacock Road in Cambridge, Ohio
 * The Red Brick Tavern in Lafayette, Madison County, Ohio, built in 1837

Indiana

 * Hudleston Farmhouse Inn in Mount Auburn, Indiana
 * James Whitcomb Riley House in Greenfield, Indiana

Illinois

 * Old Stone Arch, National Road, near Marshall, Illinois

title: National Road