AMERICA’S FOUNDERS SPOKE OUT STRONGLY AGAINST THE EFFECTS OF TARIFFS ON AMERICA'S PROSPERITY
At The 1773 Boston Tea Party, they destroyed tariffed products
On December 16, 1773, American colonists boarded English ships in Boston Harbor to throw tea into Boston Harbor to protest the tariff imposed on tea.
On July 4, 1776, they spoke out again in the Declaration of Independence, decrying imposed tariffs:
For cutting off our Trade with all parts of the world:
For imposing Taxes on us without our Consent:
Taxes on specific imported products are known as tariffs. These tariffs are passed on to the purchasers of those products in the colony or country where they are consumed through price increases on those specific products. The cost of the tariff is directly paid by the importer and built into the prices they charge, so these price increases are inflationary exactly as any other price increase is, reducing consumer purchasing power for all other goods and services – just like a pay cut would also reduce a family’s purchasing power. Imposing tariffs typically results in retaliatory tariffs which raise prices dramatically, and result in trade wars which can cut off trade between nations, depressing both countries’ own economies.
The Founders protested these tariffs, added costs imposed on them by the unitary executive, English King George III, with the Boston Tea Party and with other protests against tariffs and transaction taxes beginning in 1773.
In the early years after independence, America’s founders used tariffs on a limited range of products to finance a small federal government which started with a few dozen employees in 1789. After a time, they steadily reduced tariffs to encourage international trade so they could sell more American products to other countries in return for agreeing to reduce tariffs on imported products. By steadily reducing tariffs on imported products, they increased the buying power of all Americans, which stimulated economic growth and prosperity as Americans bought still more products and services in America.
FAST FORWARD - AMERICA MAKES THE SAME MISTAKE AS KING GEORGE III
In 1920-30, the US reimposed high tariffs on a broad range of imports. Under the Smoot-Hawley Act, passed by the House of Representatives in May 1929, Congress doubled many tariffs, precipitating a global trade war. This caused the October 1929 Wall Street stock market crash amid the massive unregulated stock market price action speculation of the Roaring 20s. As tariffs and retaliatory tariffs expanded among nations, global trade collapsed by 67%, and American industry suffered the consequences of lost sales and profits. These impacts on America are discussed in the video at the black action button at the top of this page.
Widespread bank failures occurred all over the US in the 1930s as economic conditions deteriorated with mass bankruptcies of businesses and farms. As America's uninsured banks collapsed, depositors withdrew their money en masse - unlike today, there was no FDIC deposit insurance, so bank depositor panic withdrawals spread like wildfire. Critical local sources of business and agricultural financing completely disappeared in many places, causing still more business and agriculture industry failures. Tight money policies and the deflation of asset values of land and equipment used as collateral for the few loans available made both credit and currency ever more scarce.
With little bank financing available to meet payrolls and finance sales, the Great Depression resulted as businesses collapsed and industry ground to a halt. Free market agricultural prices collapsed as desperate farmers overproduced in unregulated agricultural markets (there were no agriculture price supports nor subsidized crop insurance). The US economy entered a deep economic depression as the official unemployment rated soared from 8% in early 1929 to over 25% by 1931, which continued until the US entered World War II in late 1941. Massive federal spending on weapons and other military hardware beginning in 1942 effectively rescued the American economy, but cost America 420,000 killed in a global war which killed 60 million people.
FAST FORWARD - AMERICA MAKES THE SAME MISTAKE AGAIN
When national governments impose tariffs on products imported from other countries, this typically results in retaliatory tariffs by that country on imports from the other nation. This depresses trade and economic growth in both countries, since tariffs increase consumer prices, which reduces the amount of money consumers have available to spend on other goods and services.
For example, China reacted to Trump's US government tariffs on Chinese made technology and other products imported to the US in 2018-2019. They imposed retaliatory tariffs on American agricultural products. Since the overall market demand for these farm products went down, this cycle of tariffs and retaliatory tariffs reduced the market price paid to all US farmers who produced those corn and soybean products, and put a significant number of American farmers out of business.
America and Europe have also had similar less-publicized trade spats over specific kinds of products in recent years – such as European nations’ wine exports to America at a time when overall American wine consumption has been declining, and American agricultural products, technology products, and services being subject to European Union tariffs and regulatory standards, and so forth.
US international trade - imports and exports - totals over $5 trillion each year, nearly 20% of our entire economy and millions of related jobs in America. America is the headquarters of far more multinational companies which do business around the world than any other nation. They are a key to American prosperity. For example, Apple phones and Boeing airplanes have sold well in China. American fruits, nuts, and other commodities like wheat, soybeans, and corn, grown by American farmers, are exported to Asia and elsewhere.
Anti-American sentiment related to tariffs and local job losses in other countries will cost American jobs. Declining exports, and sharp declines in corporate earnings as US consumer demand shrinks, and as other nations boycott products produced by American companies, will force layoffs among America's largest companies, and strengthen international competitors, reducing American influence around the world. The uncertainty which comes with abrupt policy flip-flops has already led to freezes in investment decisions in America, which will cost more American jobs. A 67% collapse in US trade, as when US tariffs were doubled in 1930, would cost millions of American jobs. After the recent compromises with three of our largest trading partners, current overall tariff levels are similar to the tariff levels which led to the 1930s economic collapse.
The aggressive tariffs program which began in 2018 led to farm bankruptcies then. Together with tight labor markets, see https://banbrainhacks.org/right-sized-workforce this combination has led to slower private sector economic growth since. Today's ever more aggressive tariffs have already led to much lower US consumer confidence, dropping sharply since November 2024 to register at its lowest level in 13 years in April 2025 https://www.conference-board.org/topics/consumer-confidence This will slow growth still further.
Just how realistic is the promised tradeoff of tariffs returning manufacturing jobs to America? Scroll down past Fentanyl Factors below for a realistic illustration of the current cost differential for manufacturing hourly work performed in America compared to China, which is a relatively high cost source of imported products among the Asian countries we import many everyday household products from - phones, shoes, clothes, refrigerators, kitchen appliances, televisions, furniture, and so on.
Continuing to permit tariff expansions, and the direct economic damage to American families, businesses, and jobs which will result, demonstrates the lack of political courage in Congress to do what is right for their constituents when their party power structure has adopted dogma to replace good economic sense based upon practical experience and sound advice. For example, the Senate recently engineered a 50-50 tie when it voted on tariffs. So the Vice President broke the tie, leaving the Senate with an imagined excuse for its failure to act against policies which are known to cause damage to the American economy. That’s how we got here. They are the reason we are here.
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Fentanyl Factors Into A Decades Long Drugs Strategy Failure - As The Excuse For Tariffs It Will Propel Economic Failure
The executive branch declared a fentanyl emergency early in 2025 as its reason for adding billions of dollars of tariffs to imported products. But it is America’s own decades old failed drug strategy which has led to a 750% increase in the death rate since Nixon declared the “War on Drugs” in 1971. The fentanyl epidemic itself.is decades old, as this class of drugs date from the 1960s, when synthetic opiods were broadly introduced to replace morphine and codeine, which come from opium poppies, which also give us heroin, itself a centuries old drug problem. The fentanyl problem first arose in America, not in Canada, Mexico, or across any ocean. Purdue Pharma, an American company formed in 1892, and responsible for much fentanyl abuse and many of the overdose deaths, was placed in bankruptcy in 2019. https://www.dea.gov/sites/default/files/2020-06/Fentanyl-2020_0.pdf
So, the fentanyl problem is not a new emergency, it’s an old failure which has never been fixed. Just like our health care system, see https://banbrainhacks.org/a-healthy-america%3F Current freezes and planned government cuts in health care funds will lead to reduced distribution of the Narcam antidote used to reverse fentanyl overdoses, so deaths will actually rise as these “emergency” tactics are applied. That’s sort of like suspending ambulance services and closing hospital emergency rooms to combat accidents.
Tariffs have a similar economic impact on American farms, businesses, and American jobs to cutting emergency services to combat emergencies. Economists urged Hoover not to sign the Smoot-Hawley Act which raised tariffs to about the same level as is in force as of May 2025. The economic impacts will be similar today - reduced growth, higher government deficits, and lower employment - though far fewer bank failures and bankruptcies will result due to Federal Reserve Bank interventions and FDIC deposit insurance safeguards put in place in the early 1900s after similar economic calamities - so the damage will be more contained than in the 1930s.
