President James Monroe

Tariffs and Free Trade

July 22, 2019

President James Monroe

Dear President Monroe:

Today, free trade and tariffs are a subject of much conversation and debate in Washington. Following the War of 1812, Congress passed the Tariff Act of 1816 levying duties designed to encourage domestic manufacturing while reducing reliance on British and other foreign manufactures while maturing domestic industry which rose considerably during the War and the Embargo era.

It was your take on tariffs from your State of the Union address in 1822 which addressed this protectionist issue and which still carries a lot of truth today and should be considered in any discussions involving both issues. This quote from that state of the Union Address pretty much sums up tariffs even after all these years later:

“From the best information I have been able to obtain it appears that our manufactures, though depressed immediately after the peace, have considerably increased, and are still increasing, under the encouragement given them by the tariff of 1816 and by subsequent laws. Satisfied I am, whatever may be the abstract doctrine in favor of unrestricted commerce, provided all nations would concur in it and it was not liable to be interrupted by war, which has never occurred and can not be expected, that there are other strong reasons applicable to our situation and relations with other countries which impose on us the obligation to cherish and sustain our manufactures.”

President Monroe, let me give you a little insight as to our situation today. Over the last 20 to 30 years the United States has slipped from being a manufacturing power which occurred when most companies sent the work overseas in pursuit of cheaper labor and costs. You, however, felt that protecting, sustaining and cherishing our “manufactures” was an obligation. President Monroe, you also spoke about unrestricted commerce which is better known today as free trade and you warned that it was an abstract concept and it can only occur if all nations agreed. Well you seem to have been proven right in that not all nations act fairly in regard to free trade. Even when treaties and agreements are in effect, nations find ways to circumvent them. Then there are trade agreements that run their course and become obsolete and need to be updated.

Finally, you also suggested that manufacturing needed to be protected since unrestricted commerce cannot be relied upon since it can be interrupted by war and could affect our national defense. President Monroe, a perfect example of this is that at one time the United States was a huge producer of steel and now we are the largest importer of steel in the world. What would happen today if a product essential to our national defense was controlled by a country that might hostile to us or the companies that were essential to their manufacturing were not in line with the United States?  But you already know all this and realized this almost 200 hundred years ago.

While Washington is in an uproar over the latest trade wars and tariffs, some people there might be wise in looking at your thoughts on this matter and give them some serious consideration. President Monroe, I guess you might say that sometimes Tariffs might be a necessary evil. Once again, the wisdom of you and the other founders comes shining through and we all might benefit from learning and heeding your advice.

Sincerely,

Andrew DeMarco