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History of US Tariffs

Today, the United States seems to be going back to a protectionist policy that was in place for 250 years from 1789, through to the end of World War II. The average tariff during that period on goods entering the US was 38%. However, the US didn’t do this to punish countries or control the influx of products. The main reason the US charged tariffs is because they did not introduce income tax until 1917, and relied on Tariffs to finance its activities including war. At the end of WW II, most of America’s competitors’ (England, Europe, Japan, Korea, China) industrial base had been wiped out by the war. America believed it had a significant competitive advantage and wanted to export goods and services to rebuild these economies on a “tariff free basis”. The US did not fear competitive imports from these war-ravaged countries and signed on to GATT in 1947. (more…)

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