Tariff of 1842
The Tariff of 1842, or Black Tariff as it became known, was a protectionist tariff schedule adopted in the United States to reverse the effects of the Compromise Tariff of 1833. The Compromise Tariff contained a provision that successively lowered the tariff rates from their level under the Tariff of 1832 over a period of ten years until the majority of dutiable goods were to be taxed at 20%. As the 20% level approached in 1842, industrial interests and members of the Whig Party began clamoring for protection, claiming that the reductions left them vulnerable to European competition. The bill restored protection and raised average tariff rates to almost 40%.
The bill stipulated sweeping changes to the tariff schedule and collection system, most of which were designed to augment its protective character. The law replaced most ad valorem rates with specific duties assessed on a good-by-good basis. It also repealed the credit system of tariff finance and replaced it with a cash payment system, collected at portside customs houses.
Legislative history
The Black Tariff was signed into law somewhat reluctantly by President John Tyler, following a year of disputes with the Whig leaders in Congress over the restoration of national banking and the government's land disbursement policies. For the previous year, Whig leaders in Congress had sent bills to Tyler coupling the tariff hike with a public land disbursement package insisted upon by Henry Clay, prompting a presidential veto.
In the summer of 1842 representatives from the northeastern manufacturing states began feeling electoral pressures for a tariff hike before the elections that fall and abandoned Clay's land disbursement program. The resulting bill contained the tariff hike alone that satisfied the manufacturers and was acceptable to Tyler, since it lacked the land disbursement provisions. The main beneficiary industry to receive protection under the tariff was iron. Import taxes on iron goods, both raw and manufactured, amounted to almost two thirds of their price overall and exceeded 100% on many items such as nails and hoop iron. The law also raised the percentage of dutiable goods from just over 50% of all imports to over 85% of all imports.
Impact
The impact of the 1842 tariff was felt almost immediately through a sharp decline in international trade in 1843. Imports into the United States nearly halved from their 1842 levels and exports, which are affected by overall trade patterns, dropped by approximately 20%.
The Tariff of 1842 was repealed in 1846, when it was replaced by the Walker Tariff. The Whigs' loss of Congress and the presidency in 1844 facilitated a Democratic-led effort to reduce the rates again. Concerns that the Black Tariff's high rates would suppress future trade and customs revenue with it fueled the movement to repeal the act.