Tariffs and Economic Development in the USA: New Evidence from a New Dataset of US Product-Level Tariffs, 1789 - Present

National Bureau Of Economic Research Inc, Cambridge MA

Investigators

Abstract

This award funds an innovative research on the role of tariffs played in the transformation of the US economy from an agricultural economy to an industrial one in the 19th and 20th centuries. At the heart of this project is the compilation of a new open-access database of US tariffs since 1789 for every product covered by US tariff laws. The database will be easily accessible and searchable using any text editor or a spreadsheet application and it allows users to trace product-level tariff protection for the US economy since 1789. The researchers will use this data set to investigate several trade-related questions, such as why different products attracted different tariff structures, what role tariffs played in the transformation of the US economy from an agricultural economy to an industrial economy, and how tariff policies affected congressional politics in the 19th and early 20th centuries. Having a comprehensive open-access data of tariff rates will allow US consumers, producers, and policy makers to better understand how tariff policy has evolved over time. The data will also help users evaluate the economic impact of tariffs on consumers and producers and thus the wellbeing of Americans. Since current policies are a function of past policies and experience, this database will be an important input for anyone thinking about the future of American trade policy. The results of this research will inform tariff and other trade policies. This award funds and important and innovative research on the history of US tariff policy. The central part of this research project is to compile a large database of product-level tariffs from 1789 to 1988 and merged it with the post-1988 tariff data. The data will be a user-friendly text-based database of all US import tariffs and users will be able to find the statutory tariff rate for each tariff line since 1789 as well as track tariff rates by SITC (revision 2) code as well. The researchers will use this dataset to study the political and bureaucratic determinants of tariff rates in the early US republic (1789 – 1861). In addition, the research will study the incidence of tariff rates by focusing on the progressivity and regressivity of tariff rates. The researchers will also explore the connection between industry level productivity growth, structural change, and tariff policy using novel identification strategies to reveal causal impacts of tariff policy on these outcomes. The results of this research will inform not only academic interpretations of US trade policy but also help policy makers to better understand the aggregate and distributional impacts of American trade policy. The results of this research will provide inputs into more efficient trade policies thus increase economic growth, broaden consumer and producer choice, and thus improve the wellbeing of Americans. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.