Tariffs In 1812

It’s 1812, and Britain and France are in a spat.

More specifically, power hungry Napoleon has schemes to take down Britain. However he lacks the naval power to invade, so he decided to hit them where it hurt, their economy.

France banned US ships from European ports if they had traded with Britain or carried British goods.

Britain retaliated by seizing American vessels attempting to trade with France and forced US sailors to work in the British navy, which pushed the US over the edge into declaring war.

Amidst the conflict, American merchants are in serious trouble.

They’ve relied heavily on Britain for importing manufactured goods: textiles, tools, iron products, machinery. To bridge the gap while British goods are unavailable, domestic manufacturing, especially in New England, was heavily invested in. American factories sprang up.

But when the war was resolved in 1815, a surplus of British materials stockpiled during the war and superior manufacturing capability with decades of experience, lower cost of labor, and superior technology resulted in a flooded US market.

America’s nascent factories could not compete.

Northern manufacturers demanded protection, leading Congress to pass the Tariff of 1828 imposing a 38-45% tariff on manufactured goods, textiles, iron, and other manufactured product, not raw materials.

Here’s the problem: the North and South had completely different economies. The North had a growing manufacturing sector while the South had cotton and tobacco plantations, exporting their crops and importing the manufactured goods they didn’t produce.

The tariffs meant Southerners paid 38-50% more for manufactured goods, everything from clothing to farm equipment, while getting zero benefit. No factories to protect, just higher costs.

They saw it as the North forcing them to subsidize Northern businesses.

South Carolina was so angry they tried to nullify the tariff in 1832, nearly triggering a civil war.

Andrew Jackson threatened military force to uphold federal law. Eventually a compromise lowered the tariffs, but the regional tension remained, a preview of conflicts to come.

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