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Why were tariffs first supported, then opposed, by American companies in the period after the Civil War?

User Vabanagas
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2 Answers

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Final answer:

American companies initially supported tariffs for revenue and protection against foreign competition, but opposition grew due to retaliatory European tariffs affecting exports and higher goods prices, especially harmful to the Southern and Western states.

Step-by-step explanation:

Initially, American companies supported tariffs after the Civil War because these taxes on imported goods generated significant revenue, encouraged domestic job creation by protecting US factories from foreign competition, and helped to pay off federal debts, including those from the Civil War.

However, opposition to tariffs grew among American companies, particularly as Southern Democrats returned to Congress and criticized the tariff policy due to the negative impact on Southern and Western economies. The increase in tariffs led to European retaliation with their own tariffs on American exports like cotton and tobacco, which adversely affected US exporters. Furthermore, because most US factories were in the North, Southerners and Westerners rarely benefited from the protection of the manufacturing sector and faced higher prices for manufactured goods.

Overseas, Britain turned toward alternative sources like India to avoid taxes on American cotton, harming US cotton exports. Workers supported tariffs because they protected domestic production and employment, but farmers opposed them because tariffs on foreign manufactured goods led to retaliatory taxes on American exports. These conflicts of interest made it difficult for political movements such as the Populist Party to unite farmers and urban laborers under a common cause.

User Ivan Ruski
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These were enacted, in part, to appease domestic constituencies, but ultimately they served to hinder international economic cooperation and trade in the late 1920s and early 1930s. High tariffs were a means not only of protecting infant industries, but of generating revenue for the federal government.

User GregoirePelegrin
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