Not until 1816 was a tariff enacted with any serious protectionist intent, according to Dartmouth economist Douglas Irwin. Protectionism peaked in 1828 with what came to be known as the Tariff of Abominations, which raised average tariff rates on all merchandise imports to an all-time high of 57.3%. During those years of rising tariff rates, U.S. industrial output grew at an average annual rate of 4%.
With the election of Andrew Jackson and rise of the Democratic Party in a political backlash to the 1828 protectionist policy, tariffs were reduced. By 1860 the average tariff on all imports was 15.7%, having fallen by 73% over three decades. During that same time frame, the average annual rate of growth in industrial output was 6.7%—more than 40% higher than during earlier years when average tariff rates were rising.
We calculated annual growth rates of U.S. industrial production using the index figures on annual U.S. industrial production compiled by Joseph H. Davis in his important paper in the November 2004 issue of the Quarterly Journal of Economics – a paper titled “An Annual Index of U. S. Industrial Production, 1790-1915.“
