The Reasons Of Making The Tariff Of1789of The United States And Its Impacts

The Tariff Act of1789is the first national uniform tariff law in the history of theUnited States. It has played an important role in the nation's customs duties, fiscalrevenue and economic history, and generated profound and far-reaching influences.This article carries out a thematic study on the Tariff Act of1789, focusing on itslegislative reasons, legal natures and significant influences. The author argues that theTariff Act of1789was legislated to meet the urgent fiscal revenue needs of the federalgovernment, to regulate international and inter-state trades, and also to protect andpromote the development of manufacture as well as other industries. Due to itslegislation, the federal government was able to raise financial revenue and implementmercantilism according to a national uniform tariff act for the first time.It is concluded that the legislation of the act attributed to four reasons: first, thestate treasury was strapped for money; second, infant industries were struggling todevelop; third, there was lack of national uniform tariff laws; and fourth, theinternational mercantilism had gone rampant.It is also concluded that the act and its successor exerted significant impacts onthe following four aspects: first, they developed new revenue channels; second, theyprotected and promoted industries; third, they gave an impetus to the internationaltrade; and fourth, they established the nation's mercantilism tradition.The article further discusses the legislation, contents, nature, legislative reasonsand the influences of the Tariff Act of1789. Part1is introduction, and topicsignificance, academic history, research focus, basic framework, content andmethodology are introduced. Part2, from chapter1to chapter3, is the main body ofthis article, and the legislation process, legal content, legal nature and legislativereasons are discussed in detail. The legislative background, process, legal content andthe protectionist nature of the act are discussed in chapter1. Legislative reasons arediscussed in chapter2, and the influences of the act and its successive laws arediscussed in chapter3. Part3is the conclusion of the article. Chapter1explains the legislative background, process and legal content of theact, emphasizes its protectionist nature, and reputes the "non-protectionism rhetoric"which denies it.Chapter2elaborates the four legislative reasons. First, the state treasury wasstrapped for cash. The newly-established federal government in1789wasimpecunious with a strapped state treasury left by its predecessor, and all its efforts toimprove the situation ended up in vain. So it was first choice of the federalgovernment to establish a national uniform tariff law to enrich its treasury.Second, the infant industries were having a hard time to survive and develop. In1789when the new federal government was founded, the typical infant Americanmanufacture was struggling under the fierce competitions from foreign manufactures.This situation dated back to the American federation period, when native infantindustries were bankrupt, closed or struggling under the cruel competition of theEuropean especially English manufactures. During federation, the American peoplestrongly advocated protectionism to protect and promote its manufacture.Manufacture protection motives and impacts greatly pushed forward the legislation ofthe Tariff Act of1789.Third, there was lack of a national uniform tariff law. The new federalgovernment in1789was faced with a situation of no national uniform law, left by itspredecessors. A lack of national uniform tariff law resulted in many adversities:inter-state tariff wars broke out, import restrictions and internal market protectionswent ineffective, the formation and development of national markets were impaired,national economic development was impeded, and the interests of various parties whoheld nationalist value were damaged. The American people had strongly asked for theadvent of a national uniform tariff law to eliminate these adversities, but ended up infailure. So it was the major task of the new federal government to legislate a nationaluniform tariff law.Fourth, the international mercantilism was rampant. In1789when the newfederal government was founded, international mercantilism was rampant in theUnited States, which dated back to the victory of the war of independence in1783, and it caused several serious damages to the United States: the country suffered fromserious trade deficit, the shipping industry and re-export trade were impeded, noblemetals witnessed massive outflow which consequently caused a comprehensivenational economic crisis. The American people tried to restrain the rampantinternational mercantilism by authorizing the federal parliament to formulate auniform foreign trade policy but in vain. The raged international mercantilism playedan important role in the legislation of the Tariff Act of1789.Chapter3discusses the profound and far-reaching influences of the Tariff Act of1789and its successive law. First, they developed new revenue channels. Due to thelegislation of the Tariff Act of1789, the federal government was able to collectfinancial taxes according to a national uniform tariff law, and the act laid the legalfoundation for successive tariff law concerning federal tariff and revenue. A highproportionate and increasing part of the total federal fiscal revenue was credited to theact and its successive law.Second, these tariff laws protected and promoted the domestic manufacture. Themanufacture tariff protectionism was originated in the act of1978, and was carried onand reinforced by the successive tariff law. Therefore, these tariff laws protected andpromoted the development of the American industry and blazed the trail for Americanindustrialization.Third, the act gave an impetus to international trade. Trade protectionism wasoriginated from the act, and was carried on by and reinforced in its successive law.These laws promoted the development of re-export trade and shipping industry bylimiting imports and promoting exports, and in this way they improved theimbalanced situation of American foreign trade and expanded the domestic market.Forth, the act established a tradition of American mercantilism. The actestablished a mercantilist policy mode which embodied and implemented a uniqueAmerican-style mercantilism, including classical mercantilism, retaliatory andcountervailing mercantilism and Hamilton manufacture protectionism. The policy wascarried on and reinforced in the successive tariff law. The Tariff Act of1816, based onthe act of1789, pushed the American mercantilism to a new level where the manufacture tariff protectionism predominated. Since the1970s, the mercantilismconcept established in the Tariff Act of1789has reasserted itself in the form of a newmercantilism in a new era. However, the new American mercantilism is in essence akind of circumstantial, localized and precisely-targeted protectionism.Part3is the conclusion of the article. It makes a brief conclusion of thelegislative reasons and major influences of the Tariff Act of1789.