The U.S. tin tariff from the 1890s serves as an illustrative case of effective industrial policy, highlighting that tariffs work best when aligned with actual production conditions.
President Trump’s imposition of steel tariffs shifted the conversation from merely focusing on low prices to emphasizing economic security, manufacturing capabilities, and the resilience of supply chains. However, if we’ve learned anything from the past, it’s that we need to make sure tariff strategies also bolster all industries in need of protection—not just steel mills, but also the manufacturers that rely on them.
Prior to 1890, the U.S. was significantly reliant on tin imports from South Wales. Tinplate was critical for food cans, industrial packaging, and roofs, yet American producers couldn’t compete with the cheaper British imports. By the late 1880s, local production had nearly vanished.
In response, Congress enacted the McKinley Tariff of 1890, raising tariffs and establishing clear criteria for success. Essentially, U.S. production needed to reach a third of imports within seven years to maintain the tariffs. If not, those tariffs would be lifted. As former Congressman William McKinley noted, the aim was “to elevate the tariffs on foreign tinplate to justify its manufacture domestically.” This approach wasn’t just about raising prices; it sought to enhance domestic production capacity.
However, the decision stirred controversy. Canners faced increasing production costs. Concerns grew within the National Canners Association that food processors might go bankrupt unless they absorbed those costs. Consumers understood this reality, resulting in significant political repercussions for Republicans during the 1890 elections.
Yet, despite the controversies, the policy proved effective. New factories sprang up in states like Pennsylvania, Ohio, and Illinois, and by 1897, domestic production surpassed the Congressional thresholds. By the dawn of the 20th century, the U.S. had overtaken Britain as the leading global tinplate producer. Economic historian Douglas Irwin determined that tariffs expedited the development of the American tinplate industry by about a decade.
These tariffs were beneficial because domestic production ramped up quickly enough to offset imports.
Today’s tin steel scenario presents almost the reverse issue. Current American factories produce nearly 20% of the tinplate needed, but that output is dwindling. A 25% steel tariff introduced in 2018 has led domestic steel manufacturers to pivot toward more lucrative products, and unlike the 1890s, there is no surge of investment to fill that void.
U.S. can manufacturers still rely on imported tinplate since domestic supply falls short of meeting American consumers’ desires for canned fruits, vegetables, and beans. In the current economic climate, tariffs seem more like an extra burden than a catalyst for new investments. They weigh heavily on manufacturers with no alternative options, and these costs eventually filter down to food processors, producers, grocery retailers, and ultimately American households.
Additionally, foreign competitors avoid many of the expenses that U.S. manufacturers incur while vying for the same market, thanks to lower-cost steel produced overseas. They can ship finished canned goods directly to U.S. stores at much lower tariffs. This competitive imbalance raises questions about the effectiveness of current tariff policies.
This doesn’t negate the overall argument for tariffs, of course. The success of the McKinley tariffs stemmed from policymakers’ clarity about their objectives: generating domestic production in areas where it was virtually nonexistent. The modern challenge lies in preserving the competitiveness of U.S. agriculture and food production while re-establishing domestic tinplate manufacturing capacity.
To address this, a temporary reduction in tariffs on imported tinplate that cannot be sourced domestically could bolster U.S. food production and canned goods manufacturing, all without abandoning the effort to rebuild steel industries. Lower input costs would help retain food manufacturing jobs and support farmers until domestic production ramps up.
Furthermore, the administration should impose a 50% Section 232 steel tariff on imported filled canned goods. This would help close the cost gap that foreign competitors, like China, sidestep, ensuring that finished canned product origins are traceable and reduce loopholes in the current framework.
Lastly, Congress ought to attach production benchmarks to the current tin tariff, borrowing from the 1890 model. A requirement for domestic production to meet certain thresholds within specified timeframes could ensure that tariffs are only upheld if domestic manufacturers deliver on their commitments. McKinley didn’t merely enforce tariffs; he made their validity contingent upon results.
President Trump has prioritized U.S. manufacturing policies, but the next logical step is crafting tariff strategies that support the entire production chain—from steel mills to can manufacturers, food processors, farmers, and grocery shelves.
The lesson from 1890 isn’t just about enforcing tariffs; it’s about making sure we achieve the aim of expanding American production while reinforcing American industry.
