"Trump's tariffs are dramatic only if you have a short historical memory"

Tariffs and trade wars have hit the headlines in recent months as US president Donald Trump pursues aggressive economic policies. But are they really so unprecedented? FRANK TRENTMANN spoke to Matt Elton about centuries of 'discriminatory taxes'

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Matt Elton Which historical precedents sprung to mind when you were reading the news about high tariffs being imposed by the US on imports of commodities such as steel and aluminium?

Frank Trentmann States have always tried to control what comes in and goes out. But it’s probably worth mentioning, in the current context, that a tariff was one of the first-ever acts of Congress passed by the United States in the late 18th century, mainly as a way to bring money into its coffers. And that’s one of the key points we should make about tariffs: although we tend to refer to them generically, they can have many different functions. One is raising revenue; another is to keep out foreign competition to benefit producers at home; yet another is as a negotiating tool, to improve trade or political relations.

The big problem we can see from history is that you can’t achieve those three goals simultaneously because they cancel out one another. So nations have come up with a range of different ways to try to reconcile those three aims and to maximise how well they work.

Is it true that, despite variations in form designed to balance those three objectives, tariffs are always taxes imposed on goods and services?

It’s important to make the point that a tariff is a discriminatory tax, to distinguish it from a regular revenue duty, which is not set out to be discriminatory. Britain in the Victorian and Edwardian eras, for instance, was a free-trade country which had revenue duties — for example, on beer - but these applied to domestic beer as well as foreign beer. They are so-called excise duties.

Tariffs only target foreign imports, with the specific purpose of giving home producers an advantage over foreign producers trying to sell their goods in your market, which it penalises. So that’s a big distinction.