Tariff of 1816

The Tariff of 1816 (also known as the Dallas tariff) is notable as the first tariff passed by Congress with an explicit function of protecting U.S. manufactured items from overseas competition. Prior to the War of 1812, tariffs had primarily served to raise revenues to operate the national government. Another unique aspect of the tariff was the strong support it received from Northern states.

The bill was conceived as part of a solution to the purely domestic matter of avoiding a projected federal deficit reported by Secretary of the Treasury Alexander J. Dallas. International developments added key facts to the debate; in 1816 there was widespread concern among Americans that war with Great Britain might be rekindled over economic and territorial issues. A tariff on manufactured goods, including war industry products, was deemed essential in the interests of national defense.

The tariff was approved on April 27, 1816, as a temporary measure, authorized for only three years (until June 1820). Northern efforts to establish permanent protection in 1820, after tensions with Great Britain had eased, provoked a backlash among Southern legislators. The South consistently opposed protective tariffs during the remainder of the ante bellum period.

The trade restrictions imposed by Great Britain and France during the Napoleonic Wars, the US Embargo Act of 1807 and non-intercourse policies, as well as the War of 1812: all these crises forced Americans to develop domestic manufactures to provide goods formerly supplied by Europe. Through necessity American domestic industries had grown and diversified significantly, especially cotton and woolen textiles, and iron production.

Sectional characteristics of the country were also taking shape: the Northeast was transitioning from trade and shipping towards industrial enterprises; the Deep South concentrating on cotton cultivation, and the West seeking transportation routes to market their agricultural goods.

Despite these sectional developments, America emerged from the War of 1812 as a young nation-state, with a renewed sense of self-reliance and common identity.

The Treaty of Ghent in December 1814 did not resolve US–British boundary and territorial disputes in Louisiana and Spanish Florida. The frontier remained a flashpoint for international strife. In addition, British economic aggression persisted. In an egregious move to recapture American markets, Great Britain proceeded to systematically flood the US markets with superior manufactured items at cut-rate prices, the aim of which was to drive American manufacturers out of business.

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