Make the 1890s great again? That appears to be the plan if Donald Trump becomes president and imposes a 10%-20% tariff across the board plus a 60% tariff on Chinese imports. Channeling our 25th president, Trump said, “In the words of a great but highly underrated president, William McKinley, highly underrated, the protective tariff policy of the Republicans has made the lives of our countrymen sweeter and brighter.”

Countrymen at the time did not agree. The McKinley Tariff of 1890, enacted when Rep. McKinley headed the House Ways and Means Committee, raised the average tariff from 36% to 49.5%. Within this average, tariffs on some goods were eliminated entirely while tin plate was taxed at 70%.

Reaction was swift. In the 1890 election, Republicans were thrashed, losing 83 out of 171 House seats. In 1892, Democrat Grover Cleveland returned to the White House defeating incumbent Republican Benjamin Harrison.

The upshot was the Wilson-Gorman Tariff of 1894. While Rep. William L. Wilson shepherded a bill through the House significantly lowering rates, Sen. Arthur P. Gorman eviscerated reform in the Senate to such an extent that President Cleveland pronounced the bill perfidious and dishonorable. It became law without Cleveland’s signature for the sole merit of being better than nothing.

The pendulum shifted again when McKinley was elected president in 1896. The Dingley Tariff of 1897 not only raised average rates to 57% but imposed tariffs on wool and hides, which had been tariff-free since 1872.

The tariffs of yesteryear in the 1890s had the same effect as tariffs from time immemorial. Take the 1890s tariffs on sugar as a prime example. Tariffs raised the price of imported sugar, which was otherwise less expensive than domestic sugar. This shielded domestic cane growers and the powerful American Sugar Refining Co. — which controlled 90% of refining capacity — from competition.

As economist Milton Friedman said, “We call a tariff a protective measure. It does protect. It protects the consumer very well against one thing. It protects the consumer against low prices.”

Why do tariffs live on? Apart from a national security argument that does not apply to all the tariffs retained by President Joe Biden or the across-the-board tariffs proposed by Trump, there are two reasons. First, the benefits are concentrated while the costs are diffuse. In the 1890s, the sugar industry received millions in benefits while consumers paid a few pennies more per pound. Special interest lobbying for favored financial treatment was and is intense.

Second, no one sees the jobs that are not created when the millions or billions paid in tariffs are not available to be spent elsewhere.

As economist Adam Smith wrote in 1776, “In every country it always is and must be in the interest of the great body of the people to buy whatever they want of those who sell it cheapest. The proposition is so very manifest that it seems ridiculous to take any pains to prove it. Nor could it ever have been called in question had not the interested sophistry of merchants and manufacturers confounded the common sense of mankind. Their interest is in this respect, directly opposed to that of the great body of the people.”

Jeffrey Scharf welcomes your comments. Contact him at jeffreyrscharf@gmail.com.