Since independence, the government of the United Stated has always enjoyed tariffs which have benefited their foreign trade policy. The tariffs were to help the government to obtain revenues for its operation. In the early periods of the inception of the US government, these were the primary source of finances for America. This was a great source of finances, and it was used from the year 1789 up to 1914. The funding from tariffs was useful to the growth of the American economy in these early days. This assignment discusses the funding from tariffs at the beginning of days in America by looking at both sides of the coin.
The United States government during the colonial era had relied on the rates set by the British government which was there Colonists. These rates were a bit fair on all the goods imported or exported from Britain. Through levying of import duty, there was a strong foundation for self-sustenance of the American government. A government that wants to have proper rule must have a strong financial base, and this is what the US was striving to achieve.
The autonomy of taxing goods by the government had to be pointed out clearly in the governing constitution. It is a fact that the legislature of the United States government by ensuring this aspect is clearly pointed out in the constitution so as to avoid controversies and future contradictions. The duty of setting rates and collecting taxes was left entirely in the hands of the Congress.
The economy of the US grew rapidly during these early years of its independence. The British had just left and American leadership and the freedom to set their rules especially in the trade industry begun. One of the most important decisions made at this point was trade restriction by the imposition of tariffs. The trade agreements between America and other countries were set afresh, and most countries were heavily burdened by these new trade rules.
Financial analysts and most economists of these days argued that the restrictions could adversely affect the United States government. However, contrary to their expectations, the economy of the US scaled up rapidly, and this impressed so many observers. These people had believed that the restrictions would scare away the States trade partners and thus reduce their financial income. Unknown to them, the United States by these time had become a major trade destination thus, despite the restrictions, their trade partners could not withdraw.
The restriction was not all beneficial to the country as it came with a few drawbacks and challenges. Foremost, the high tariffs were the great hindrance to the idea of specialization. Most of the traders were forced by the economic situations to engage in multiple lines of trade to have good profits at the end of the trading period. Apart from this, the spirit of competition was killed by high tariffs imposed on the goods. This is because most people who wished to engage in business were scared away from the business environment. Also, this also caused redundancy since there was reduced innovation with reduced competition. Is it not a fact that increased competition in the labor market gives rise to great innovation? The American consumers and producers could not mine the abilities of non-Americans. In other words, the country was reduced to a situation of zero grazing on the business and skill providers.
The damages that were caused by these high tariffs in the early America could not be seen by many. This was because the entire nation was drunk into mad love with the huge bounty the country as making. At this rate, almost everyone in the country supported the high tariffs all with the hope that the economy of the country would keep rising. As a matter of fact, the economic stability of the country due to this high tariff contributed immensely to its establishment as the worlds most powerful nation. Without this financial benefit, it could not have reached this far. The most beautiful thing is the fact that the tariffs kept increasing annually and this is an indication that the economy kept improving while the business environment became better.
The process of industrialization was quickly facilitated by the funds collected from the tariffs. It should be understood that during this period, the United States of America. The establishment of these industries required finances, and this could not be acquired through borrowing. The country had to look for inward sourcing, and this was the best means of supply for these finances.
In conclusion, the tariffs funding early America had the great impact on their political and economic growth. The Native Americans learned the act of imposing tariffs from their colonist, and they used this critical lesson to develop and become stronger. The development involved the industrialization and establishment of robust businesses. Without tariffs, most of these achievements could not be attained since commercial sources were narrow in these days.
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