McKinley’s Tariffs: A Lesson from History

As the U.S. once again debates the use of tariffs to protect domestic industries, history offers a valuable case study in how such policies play out over time. President William McKinley, one of the staunchest advocates for protectionism in U.S. history, implemented some of the highest tariffs ever seen, arguing they would strengthen American manufacturing and reduce reliance on foreign goods. Yet, by the end of his presidency, even McKinley himself began to rethink whether high tariffs were the best path forward. What can we learn from his experience?

McKinley’s High-Tariff Vision

Before he became president, McKinley was the driving force behind the McKinley Tariff of 1890, which raised duties on imported goods to nearly 50%. The goal was to protect American steel, tinplate, textiles, and other key industries from foreign competition. Among the sectors most affected was construction, which relied on imported steel, tin, lumber, and other building materials.

The immediate effects were dramatic. Prices on imported goods surged, causing construction costs to rise almost overnight. Builders and contractors, already working on thin margins, had to either absorb the costs, pass them on to customers, or find alternative materials. Tinplate, essential for roofing and metal fixtures, saw import duties more than double—from 30% to 70%—leading to higher prices for homes, office buildings, and public infrastructure (Taussig, The Tariff History of the United States, 1910).

The backlash was swift. The McKinley Tariff proved deeply unpopular with working-class Americans, who saw everyday goods—from clothing to home essentials—become more expensive. In the 1890 midterm elections, voters delivered a landslide defeat to McKinley’s Republican Party, leading to one of the biggest political shifts in congressional history (Stanwood, American Tariff Controversies, 1903). The economic downturn that followed, culminating in the Panic of 1893, only intensified the criticism.

The Dingley Tariff and McKinley’s Continued Protectionism

Despite this setback, McKinley remained committed to high tariffs when he became president in 1897. His administration pushed through the Dingley Tariff Act, which set import duties at an average of 51%—the highest in American history at the time (Irwin, Clashing Over Commerce, 2017). Once again, this meant higher costs for builders and consumers. While American steel and tinplate manufacturers benefited, the broader economy continued to struggle with inflated prices and trade tensions.

For the construction industry, the impact was twofold:

1. Higher material costs meant more expensive projects, slowing down development and reducing profit margins for builders.
2. Limited foreign competition allowed domestic producers to raise their own prices, further burdening those reliant on construction materials.

Despite McKinley’s belief that tariffs would protect American jobs and industry, many businesses felt constrained by rising costs, and consumers bore the brunt of inflation (Parker, The Panic of 1893, 2019).

A Change of Heart: McKinley’s Final Stance on Trade

By the end of his presidency, McKinley began to rethink his stance on high tariffs. In one of his final speeches, delivered at the Buffalo Exposition in 1901, he acknowledged that overly restrictive trade policies were unsustainable, stating:

"The period of exclusiveness is past… commercial wars are unprofitable. Reciprocity treaties are in harmony with the spirit of the times; measures of retaliation are not."

This marked a significant shift in his views. Rather than rigid protectionism, McKinley embraced trade reciprocity—lowering tariffs in exchange for better deals with trading partners (McKinley, Buffalo Exposition Speech, 1901). He recognized that economic growth depended on global trade rather than isolationism.

Unfortunately, just days after this speech, McKinley was assassinated, and his evolving trade vision never fully materialized. His successor, Theodore Roosevelt, largely continued protectionist policies, delaying any major tariff reform for another decade.

What Can We Learn from McKinley’s Tariff Policies?

McKinley’s experience highlights both the short-term benefits and long-term consequences of tariffs. While they can protect domestic industries, they often lead to higher prices for consumers and businesses, particularly in construction, where material costs are a major factor. McKinley’s late realization—that trade should be balanced rather than one-sided—remains relevant today.

As the U.S. once again debates the role of tariffs, the lesson from McKinley’s presidency is clear: protectionism may offer temporary advantages, but long-term economic growth requires a more nuanced approach to trade. Will today’s leaders heed that lesson, or will history repeat itself?

References

• Taussig, F. W. (The Tariff History of the United States, 1910)
• Stanwood, E. (American Tariff Controversies in the Nineteenth Century, 1903)
• Parker, D. (The Panic of 1893: The Untold Story of a Financial Crisis, 2019)
• Irwin, D. (Clashing Over Commerce: A History of U.S. Trade Policy, 2017)
• McKinley, W. (Buffalo Exposition Speech, 1901)