My friend Tim Worstall sent to me the following e-mail in response to my post on the question of whether or not mercantilism promoted U.S. economic growth in the 19th-century:
There’s a sixth point to be made, from Power and Plenty by Findlay and O’Rourke.
Tariffs are not the only barrier to trade. And what is important is the total barrier to trade, not that part of it which is tariff or transport or regulation or whatever.
As they show, shipping costs (long distance ones, trans-Atlantic etc) were falling so rapidly in the period 1850-1914 that despite (several?) tariff rises the total trade barriers into the US were falling throughout the period.
Another way of looking at this is that given that transport costs were high at the time (certainly in relation to nowadays) even if falling, the tariff was in fact rather lower than commonly assumed. A 40% (just as an example) tariff looks high but if transport costs are 50% of value then it’s not, not really. Certainly nowhere near the effect of a 40% tariff when transport costs are 1% of value.
