McKinley Tariff


01 october 1890         JapanJapan, Usa

USA

The McKinley Tariff Act of 1890, sponsored by William McKinley, a Republican Senator from Ohio, increased the tariffs on manufactured goods to as high as 49 percent. The Act passed with the understanding that Republicans would support the Sherman Silver Purchase Act; this Act allowed the Treasury to purchase the gold and silver output of mines in exchange for notes redeemable in silver or gold.

Impact on Farmers

The McKinley Tariff Act hurt American farmers by raising the price of farm equipment and failing to address descending agricultural prices. At the time American agricultural produce was inexpensive as farmers faced minimal competition from imports. Higher tariffs coerced farmers into purchasing protected and expensive products from American manufacturers while selling products in markets that were competitive and unprotected.

Impact on Trade

The Blaine-Harrison reciprocity provision was included in the McKinley Tariff Act. The Tariff essentially provided the president with the ability to manipulate rates in terms of foreign markets; he was able to reduce tariffs on foreign products if other nations reduced tariffs for U.S. goods. Secretary of State James G. Blaine sought to take advantage of the president’s bargaining power. A supporter of expanding trade into Latin American, he assembled the Pan American Congress of 1889. Blaine considered the reciprocity provision as a means to gain access to Latin American products and markets. The McKinley reciprocity provision is credited with being a pioneering effort to widen American trade.

Impact on American People

The tariff increased costs for all Americans in terms of purchasing power and wages. Many items that came from abroad became pricier than local products; overseas products that remained less expensive than local goods still rose in price in relation to local products. This change meant that Americans required higher compensation to compensate for decreased purchasing power and increased expenses. The escalated price of labor subsequently led to mounting costs to produce local goods.

Impact on Hawaii

In 1875 Secretary Hamilton Fish sponsored a reciprocity treat with Hawaii. This treaty backed Hawaiian sugar and subsequently the white planters owned the majority of sugar plantations. The McKinley Tariff Act opened the American market to overseas sugar and therefore contributed to a decline in the Hawaiian economy. The troubled Hawaiian economy created political issues between supporters of the Queen and planters. Although whites gained control in 1893, President Grover Cleveland rescinded an impending annexation treaty.

Impact to Republican Party

The Republican Party controlled Congress when the McKinley Tariff Act passed. The passage of this wildly unpopular Act, however, led to massive Republican defeat in the subsequent House and Senate elections. In 1892 voters reaffirmed their displeasure at the polls. Republican President Benjamin Harrison lost re-election to Cleveland.

Source: http://smallbusiness.chron.com/mckinley-tariff-act-733.html


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