“Also overlooked by those claiming that 19th-century tariffs made America great is that the country’s biggest import at the time was immigrants, who incurred no tariffs. As economists Cecil Bohanon and T. Norman Van Cott argue in “Tariffs, Immigration, and Economic Insulation,” weighing the impact of tariffs on economic growth without accounting for massive immigration—which increased from about 200,000 individuals a year in 1865 to more than 1,000,000 in 1910—can only lead to questionable conclusions. They explain that “the impact of high tariffs, clearly an insulating policy, was swamped by free immigration, a quintessential policy of economic openness.”
Trump is an avowed restrictionist on both immigration and trade. And so, if a second Trump presidency brings higher tariffs and further immigration restrictions, we won’t be as fortunate as were our 19th century forebears.
Making matters worse is that today’s economy is vastly different from that of a century ago. Globalization has interconnected markets and supply chains in unprecedented ways. Half of what Americans import are inputs they use to produce goods domestically. Tariffs on these imports increase production costs, making American products less competitive both at home and abroad.
Furthermore, the service sector—comprising industries like technology, finance, and health care—now represents nearly four-fifths of the U.S. economy. These sectors thrive on innovation, skilled labor, and access to global markets, rather than on protectionist policies.”