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Protective Tariff of 1816

James Madison

Protective Tariff of 1816: James Madison was the 4th American President who served in office from March 4, 1809 to March 4, 1817. One of the important events during his presidency was the implementation of the Tariff of 1816 that placed a 20-25 % tax on all foreign goods.

Definition of a Tariff

Tariff Definition: What is a tariff? A Tariff is a tax placed on goods imported from foreign countries. Tariffs enable a nation to raise money from these taxes and at the same time protect a nation's goods from cheaper priced foreign items.

Summary and Definition of the Tariff of 1816
Summary and Definition: American factories were new and could not compete with prices of experienced European factories. The Tariff of 1816 was the first protective tariff implemented by the government. Its aim was to make American and foreign manufactured goods comparable in price and therefore persuade Americans to buy American products.

Tariff of 1816 for kids: Background History
America was a new nation, free from the yoke of the British in the Revolutionary War. The War of 1812 (aka 'Second War for Independence' with the British) had ended in a stalemate but made Americans realize that they needed to become independent from Britain and the other countries of Europe, in a commercial and economic sense. Before the War of 1812 the US had depended on the British for most of their manufactured goods, 84% of people in the country were farmers. During the Napoleonic Wars and the War of 1812 the blockade of Europe led British manufacturers to offer goods in the United States at low prices that the American manufacturers often could not match.
The War of 1812 had created shortages in the country - the US needed to become self-sufficient. There was a plentiful supply of natural resources. The US needed factories to make the goods. The government needed to create a climate in which American trade would flourish and provide money for the industrialists. The Tariff of 1816 was part of a plan to reach these goals.

Tariff of 1816 for kids: The American System
Henry Clay (1777 1852) was a great supporter of the American System - refer to
Henry Clay and the 'American System'. The American System was an economic plan based on many of the ideas of Alexander Hamilton that aimed at improving the economy of the US and the lives of American citizens. The American System was based on:

Taxing all foreign goods, to boost the sales of US products and protect manufacturers from cheap British goods (Tariff of 1816)

Establishing another Bank of the United States to offer easy credit to Americans

Constructing new roads and canals in the West

The Tariff of 1816, placed a 20-25% tax on all foreign goods. Before the War of 1812, duties averaged about 12.5%.

Significance of the Tariff of 1816
The Significance of the Tariff of 1816: The Tariff of 1816 helped American businesses compete with British and European factories. It heralded the time in American history that is known as the Era of Good Feelings. It was the time of great inventions, an Industrial revolution, and machines like the Eli Whitney Cotton Gin and the Samuel Slater cotton mill were revolutionizing the manufacture of American goods. The protective Tariff of 1816, as part of the 'American System' made it possible for the government galvanize the manufacturing industries in America. The country saw the emergence of 'King Cotton' as a cash crop in the South and the growth of textile mills, breweries and distilleries and other factories in the north. The Northerners had particular reason to support the Tariff of 1816.

Significance of the Tariff of 1816: Protective Tariffs
The Tariff of 1816 was the first of the protective tariffs.
The Tariff of 1824 was the second protective tariff and the Tariff of 1828 (the Tariff of Abominations) led to the Nullification Crisis, in which the sectional interests of the North and the South had truly came into conflict for the first time.

Protective Tariffs
For additional facts and a timeline refer to Protectionism and Tariffs.

US American History
1801-1828: Evolution Era

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