Woodrow Wilson, Tariff Slayer

Yahoo

29-04-2025

Before Donald Trump, the last president to put tariffs at the top of his post-inauguration to-do list was Woodrow Wilson. But the lifelong academic and half-term governor came to bury tariffs, not raise them.
Wilsons eagerness to slash tariffs offers a stark contrast to Trumps determination to wield them like a stick. But there are parallels, too. Like Trump, Wilson began executing his tariff plans early in his first term - in fact, even before taking the oath of office.
In the days before his inauguration, he reached out to key members of the House, where, according to the Constitution, all revenue measures must originate. He wrote to Oscar Underwood, the Democratic chair of the Ways & Means Committee. He drafted into his cabinet Albert Burleson, chair of the House Democratic Caucus, whose duties would soon include serving as Wilsons legislative liaison on Capitol Hill, as well as postmaster general.
He tapped William Redfield, whose special expertise in the House was tariffs, to be secretary of commerce.
At the opening of the 63rd Congress, Wilson delivered his tariff message in dramatic fashion. He chose to become the first president since John Adams in 1800 to address a joint session in person. The packed chamber heard him emphasize hed called Congress into early session for one reason only: to cut tariffs.
"It is best, indeed it is necessary," the president insisted, "to begin with the tariff. I will urge nothing upon you now at the opening of your session which can obscure that first object."
There was ample context for this. Over more than half a century, high import duties on raw materials andessentials for every household had steadily increased, resulting in what politicians even then labeled the "high cost of living." Wilsons immediate predecessor, William Howard Taft, had promised a thorough-going reduction in the tariff schedules, but failed utterly when the final legislation produced by Congress proved a bazaar for special interests.
Wilsons drama produced results. Less than two months after his tradition-breaking address, the House passed the largest cut in tariffs since the Civil War. Senate action and a House-Senate conference soon produced a bill slashing average rates by 35%. It was signed into law on Oct. 3, 1913.
This was Wilsons first major achievement as president, and as history shows, it was an enduring one. Ever since, despite later increases in tariffs that proved temporary, U.S. government revenues have come primarily from taxes on business and personal incomes, not trade. That is largely due to another feature of the bill Wilson signed: the progressive income tax.
The 1913 income tax, authorized by the newly ratified 16th Amendment, combined reduced tariffs promising lower consumer prices with a modest income tax to make up the revenue loss. It was a winning recipe, especially since the new income tax entirely exempted most of the U.S. population. Even the modest top rate of 7% didnt kick in until a taxpayer reached $16 million in income, measured in todays currency. (Although, as everyone knows, that part didnt last long.)
For Wilson, prioritizing tariff reduction had been the work of a lifetime. As a southerner raised in Virginia, Georgia, and the Carolinas, he was steeped in anti-tariff tradition. The Souths textile economy, heavily dependent on exports, got no benefit from protectionist trade barriers. The young Wilsons first overt political act, at 25, was testifying against agricultural tariffs at a field hearing of the U.S. Tariff Commission in Atlanta. During his years on the faculty and as president of Princeton University, he repeatedly criticized protective tariffs in his writings and speeches.
He began his political career by running for New Jersey governor in 1910. That race came only a year after a Republican Congress passed the widely unpopular Payne-Aldrich Tariff Act. Two months after its enactment, Wilson penned a lengthy article in the North American Review, deriding the law as "the ugly face of monopoly [and] special privilege." The magazines publisher (and Wilson campaign booster), George Harvey, agreed with him that the "country is red-hot over the tariff atrocity." Harvey encouraged the fledgling candidate to hammer on this major national issue during his statewide race.
Timing is everything in politics, as Wilson discovered in 1910. It became the Democrats year across the nation, thanks in large measure to the Payne-Aldrich Tariff Act. The laws far-reaching effects hit consumers, businesses, and farmers alike with hefty price increases on hundreds of items. It was an intensely partisan issue, too: The final vote in the House fell almost strictly along party lines. In the Senate, not a single Democrat voted for the legislation.
Especially unfortunate for Republican candidates was the fact that the nations 2,600 daily and weekly newspapers were among the hardest hit by the new tariffs. They now faced sky-high prices on newsprint after Taft used his discretion under the new law to impose a 25% retaliatory tariff on lower-cost Canadian newsprint. Unsurprisingly, thousands of editors and publishers now mounted their own retaliation in the form of spirited assaults on Republicans everywhere. On Election Day 1910, Wilson rode to victory on a national Democratic wave.
When Wilson won the Democratic nomination and the presidency two years later, he carried the anti-tariff torch with him. His impressive success with tariff reform in 1913 ensured that lowering tariffs would remain a Democratic staple. A young Franklin D. Roosevelt, who served Wilson as assistant secretary of the Navy, was helped to the White House by the Republicans catastrophic blunder in the Smoot-Hawley Tariff Act of 1930. By raising the average tariff rate to nearly 60%, Smoot-Hawley ignited a worldwide trade war and cut the real value of international trade by more than 50% between 1929 and 1933.
Scalded by accusations that their tariff policy had helped turn the 1929 recession into the Great Depression, Republicans gradually gave up protectionism. By the final decades of the 20th century, they were the party of free trade, willing to reduce Americas tariff barriers unilaterally as an inducement to other countries to lower theirs.
Now, as the Trump administration again reverses Republican tariff policy, Wilsons anti-tariff arguments are once more at the forefront. Democrats have found their voice on trade, consistently arguing for consumers and against higher prices, while Republicans find themselves suddenly divided. Will next years elections resemble Wilsons debut in the 1910 midterm election year?
Time will tell. Meanwhile, one thing is certain: Somewhere, the original progressive tariff slayer is smiling.
Christopher Cox is the author of 'Woodrow Wilson: The Light Withdrawn' (Simon & Schuster, 2024).