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Name: Clashing over Commerce
Rating: 4.4 (15 reviews)
Author: Douglas A. Irwin

Douglas A. Irwin

A History of US Trade Policy

4.4 (15 ratings)

17 mins

Brief summary

Clashing over Commerce presents a comprehensive history of U.S. trade policy, highlighting the ongoing debates between protectionism and free trade. Douglas A. Irwin explores how economic interests and political ideologies shape this crucial aspect of governance.

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US History Economic Theory Capitalism & The Free Market Global Politics International Economics US Politics

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Clashing over Commerce
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What’s in it for me? How trade shaped American power, politics, and prosperity from the Revolution to today.

Few issues have divided American politics for as long – or as deeply – as trade. From the earliest days of the republic, debates over tariffs, imports, and economic independence have shaped the country’s political landscape. Trade policy has sparked regional conflicts, fueled party platforms, and reflected shifting ideas about America’s role in the world. It’s been used to fund the government, protect industry, punish rivals, and promote peace – often all at once.

In this Blink, you’ll learn how trade policy evolved from a practical necessity in the eighteenth century to a deeply polarizing issue in the twenty-first. You’ll see how economic interests, political power, and global events collided to shape decisions on tariffs and treaties. And you’ll explore the long-running tension between protection and openness that continues to define how the US approaches the world economy.

To understand where it all began, we need to go back to the colonial era – when trade restrictions helped spark a revolution.

Economic interests sparked American independence

One of the lesser-known triggers of the American Revolution was frustration over trade. In the 1760s and 70s, growing anger at British interference in colonial commerce sharpened demands for independence. The colonies relied on transatlantic trade to stay afloat, importing everything from cloth to tools and exporting crops like tobacco, wheat, and rice. But British trade laws like the Navigation Acts forced many goods through English ports, adding costs and reducing profits. For elite planters in Virginia and merchants in Boston, this inefficiency was deeply political. When Britain tried to tighten control and raise revenue after the Seven Years’ War – imposing taxes on imports and trying to limit smuggling – resistance grew fast.

Economic boycotts became a key weapon. Colonists cut imports from Britain, hoping that a drop in trade would pressure Parliament to repeal unpopular laws. These tactics had some success, and by the early 1770s, many Americans believed they could influence British policy through commercial pressure. But they also overestimated their leverage. When Britain refused to back down, calls for independence intensified.

After declaring independence in 1776, the new nation expected to benefit from unrestricted global trade. But the war upended those expectations. The British blockade strangled commerce, major ports were occupied, and exports collapsed. Even after the war ended, the picture didn’t improve much. Britain shut American ships out of the West Indies – and Congress, under the Articles of Confederation, had no power to respond. Individual states tried to retaliate, but their efforts were undermined by a lack of coordination and shared interests. The South feared giving Congress control over commerce, worried that it would favor northern shipping over southern agriculture.

This postwar trade chaos helped drive support for a new Constitution. The 1787 convention gave Congress full power to regulate foreign commerce and raise revenue through tariffs, solving a key weakness of the old system. In the new government, trade policy became a central function – and a recurring battleground. As you’ll see in the next section, the early republic relied heavily on tariffs not just to manage commerce, but to fund the government itself.

Tariffs became the backbone of the early US government

When the United States ratified its Constitution in 1788, it had no income tax, no central bank, and barely any federal infrastructure. What it did have was the power to tax imports – and that quickly became the foundation of its finances. By the early 1790s, tariffs on foreign goods were covering nearly all federal expenses, from paying war debts to funding the military. Unlike direct taxes, which were unpopular and hard to enforce, import duties were easier to collect and politically less risky. Ships arrived at a few major ports, and customs officers could tax their cargo right at the docks.

But tariffs weren’t just about raising money. From the beginning, they sparked debate about the government’s role in shaping the economy. Some lawmakers saw tariffs as a way to support domestic manufacturing by making imported goods more expensive. Others feared this would hurt consumers and spark trade retaliation. Still, many agreed that tariffs were the most dependable revenue source the country had.

Protectionism defined an era of American trade policy

In 1861, the average US tariff rate on dutiable imports was already high by global standards. By the end of the Civil War, it had jumped even higher – and unlike wartime taxes, it never came back down. For nearly 70 years after the war, tariffs became a defining feature of American economic policy. What had started as a financial necessity in the early republic hardened into a political doctrine. Protectionism – the use of tariffs to shield domestic industries from foreign competition – wasn’t just tolerated, it was actively championed, especially by the Republican Party, which held power for much of this period and drew its base from the industrial North.

The argument was straightforward: shielding American manufacturers from foreign competition would help develop national industry and provide jobs. That pitch resonated especially in states with heavy industry, from Pennsylvania’s steel mills to New England’s textile towns. But it came at a cost. Southern and western farmers, who relied on exporting crops and buying imported goods, saw high tariffs as a burden. They had to pay more for consumer products while receiving no direct benefit. This sectional divide over trade policy became one of the defining political conflicts of the late nineteenth century.

The Great Depression marked a turning point in US trade policy

When the United States passed the Smoot-Hawley Tariff in 1930, it pushed import duties to their highest levels since the Civil War. It was meant to protect American farmers and manufacturers from the effects of the global downturn – but instead, it deepened the crisis and triggered foreign retaliation. Within a few years, trade had collapsed, unemployment had soared, and confidence in protectionism was badly shaken. What followed was the beginning of an entirely new approach to policy.

In 1934, Congress passed the Reciprocal Trade Agreements Act, a landmark law that shifted the power to negotiate tariffs from Congress to the president. For the first time, US trade policy moved away from unilateral protection and toward bilateral cooperation. The idea was simple: the US would lower some of its duties in exchange for similar concessions from other countries. This reduced tariffs and began to reframe trade as a tool of diplomacy, not just economics.

Bipartisan support sustained trade liberalization in the Cold War era

By the late 1940s, US tariffs had fallen to levels not seen since the nineteenth century – but what’s more striking is how little political backlash there was. For the first time in American history, reducing trade barriers had become a shared goal across party lines. The trauma of the Great Depression and World War II had reshaped views on international commerce. Trade wasn’t just about economic efficiency anymore – it was part of a larger strategy to rebuild global stability, contain communism, and cement America’s influence abroad.

This new logic underpinned a decades-long bipartisan consensus. The US continued to expand its commitments under GATT, holding successive negotiation rounds that gradually brought down tariffs. The president, backed by renewed Trade Promotion Authority from Congress, led negotiations. And despite political shifts in Washington, support for liberal trade policy remained remarkably steady from Truman through Nixon.

Trade became a lightning rod in modern American politics

When the US signed the North American Free Trade Agreement, or NAFTA, in 1993, it was backed by both a Democratic president and a Republican Congress. That kind of bipartisan support had defined trade policy for decades. But behind the scenes, the political ground was already shifting. NAFTA passed by a narrower margin than previous trade deals, and opposition wasn’t just coming from labor unions – it was starting to cut across party lines. As globalization accelerated in the 1990s, the old consensus began to crack.

The end of the Cold War removed the geopolitical rationale that had helped sustain trade liberalization. Meanwhile, the global economy changed in ways few had predicted. The creation of the World Trade Organization, or WTO, in 1995 brought new disputes over rules and enforcement. China’s entry into the WTO in 2001 opened up vast new markets, but also exposed American workers to fierce competition. Entire industries were hollowed out, especially in manufacturing-heavy regions. While consumers benefited from cheaper goods, the economic dislocation hit hard in places with few alternatives.

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What is Clashing over Commerce about?

Clashing Over Commerce (2017) traces the evolution of US trade policy from the founding era to the twenty-first century, focusing on the political and economic forces that shaped it. It explores the recurring debates between protectionism and free trade, showing how these conflicts reflect deeper shifts in national priorities and global engagement.

Who should read Clashing over Commerce?

Curious historians of American economic policy
Policy-focused economists studying trade dynamics
Anyone interested in US trade or politics

About the Author

Douglas A. Irwin is a professor of economics at Dartmouth College and a leading expert in international trade and economic history. His best-selling works include Free Trade Under Fire and Peddling Protectionism, both widely cited for their insights into the politics and economics of trade.

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