The Trump administration has confirmed that 25 percent tariffs will be imposed on Canadian and Mexican imports starting February 1. That will provoke retaliation from Canada and Mexico. It will also reduce economic growth and wipe out jobs, if the tariffs last for more than a few days.
President Trump cites the McKinley Tariff of the late 19th Century as a model, but that tariff was a political disaster. As Wikipedia explains, the McKinley Tariff devastated the Republican Party, costing half of all Republican House members their seats because it proved so unpopular:
The Tariff Act of 1890, commonly called the McKinley Tariff, was an act of the United States Congress, framed by then Representative William McKinley, that became law on October 1, 1890. The tariff raised the average duty on imports to almost 50%, an increase designed to protect domestic industries and workers from foreign competition, as promised in the Republican platform. It represented protectionism, a policy supported by Republicans and denounced by Democrats. It was a major topic of fierce debate in the 1890 Congressional elections, which gave a Democratic landslide. Democrats replaced the McKinley Tariff with the Wilson–Gorman Tariff Act in 1894, which lowered tariff rates…..
The [McKinley] tariff was not well received by Americans who suffered a steep increase in prices. In the 1890 election, Republicans lost their majority in the House with the number of seats they won reduced by nearly half, from 171 to 88. In the 1892 presidential election, [Republican President Benjamin] Harrison was soundly defeated by Grover Cleveland, and the Senate, House, and Presidency were all under Democratic control. Lawmakers immediately started drafting new tariff legislation, and in 1894, the Wilson-Gorman Tariff passed, which lowered US tariff averages.
Trump’s tariffs will likely prove unpopular today, too. As Reason Magazine explains, Trump’s 25% tariffs will
make American consumers poorer and domestic manufacturers less competitive. From January 2024 through September 2024, total trade between the U.S. and Mexico surpassed $700 billion, while trade with the U.S. and Canada came just short of that figure. Canada and Mexico are also America’s two largest export markets: $325 billion and $275 billion worth of goods and services were sold to Canada and Mexico, respectively, over the first three quarters of 2024.
U.S.-levied tariffs would hurt all countries involved. Research conducted by the Peterson Institute for International Economics predicts that 25 percent tariffs on Canada and Mexico would decrease American gross domestic product (GDP) by $200 billion [and] Canadian GDP by $100 billion. These tariffs would also diminish American manufacturing.
TD Economics finds that “most Canadian exports are inputs used by American businesses in their own production.” Similarly, Mexico’s third-largest export to the U.S. is intermediate goods for vehicles…Erecting tariffs on Canada and Mexico would…increase the price of Canadian and Mexican inputs for American manufacturers, reducing the competitiveness of our exports internationally.
Trump’s proposed tariffs have triggered responses from Mexican and Canadian officials. Canadian Prime Minister Justin Trudeau promised that his country would “respond to unfair tariffs in a number of ways.” He has also cautioned the president, saying “Canada provides many of the necessary inputs the American economy is going to need in order to grow and boom,” such as $170 billion worth of oil, natural gas, and power. Ontario Premier Doug Ford went further, directing the Liquor Control Board of Ontario to prohibit the sale of all American alcohol in the event that Trump follows through with his tariffs.
Of course, even if tariffs harm the GOP politically, there is still no guarantee that the Democrats will win future elections. The Democrats have many awful political positions. And many Democratic members of Congress are themselves protectionists who egged Trump on in his first term when he imposed tariffs on other countries that led to trade wars. (Joe Biden largely left Trump’s tariffs in place, and added some of his own. Indeed, Joe Biden collected $144 billion in tariffs by early 2024, compared to $89 billion collected under Trump in his first term.)
When the Democrats won the 1892 presidential election — in part due to public anger over the 1890 McKinley Tariff — they inherited economic problems that they did not fix, and ultimately led to their own defeat four years later. Due to a sharp recession that began in 1893 (while the McKinley Tariff was still in effect), the Democrats lost popularity and thus the 1896 presidential election. As a result, the McKinley Tariff’s author, William McKinley, managed to get elected president in 1896. As President, McKinley signed into law the 1897 Dingley Tariff, which was, on average, slightly higher than the McKinley Tariff.
But President McKinley eventually recognized that high tariffs can provoke destructive trade wars, and his final words on tariffs, in a 1901 speech, were: “Commercial trade wars are unprofitable.”
