The U.S. economy was on a generally upward trajectory before, during and after McKinley’s term (1897-1901), despite recessions along the way. The economy grew around 4 percent per year on average from the 1870s until 1913, according to one Federal Reserve estimate, higher than those of Japan, Germany, Britain, France, Italy and Canada in the same span.
“Now, Trump would probably attribute that to tariffs — that they brought in a lot of money, they made America rich, things of that sort,” Irwin said. But tariffs were always “sort of high,” he added. “So it’s not like the tariff jump-started extra growth.”
The United States has long wielded tariffs as official policy, going back to the George Washington administration. From 1861 to 1933, in the decades leading up to and after McKinley’s presidency, average tariffs on dutiable imports reached 50 percent and remained around that level for several decades, according to a study by Irwin published in the Annual Review of Economics.
The clear factors that contributed to growth in McKinley’s time included increasing amounts of loanable funds held by U.S. banks and a spike in infrastructure-related construction such as on railroads and ships. Immigration provided cheap, unskilled labor and a small but vital pool of skilled workers. Technological advances such as the telephone also played a part.
When McKinley helped pass new tariff legislation in 1890 as a representative of Congress, raising the average duties on imports of manufactured goods to 49.5 percent, those tariffs were widely unpopular because they were viewed as beneficial to large companies and inflationary for consumers. In fact, they contributed to a landslide Republican defeat in midterm elections that year and Republican President Benjamin Harrison’s loss to Democrat Grover Cleveland in the 1892 presidential race.
McKinley’s tariff legislation also unintentionally helped spark the 1898 Spanish-American War, according to Irwin. Part of the legislation involved eliminating tariffs on sugar imports, which was a boost to sugar exporters in Cuba, then a Spanish colony. When Democrats regained control of Congress, they reintroduced sugar tariffs in 1894, hurting Cuban sugar producers, which added to the colony’s political turmoil — a factor in the war between Washington and Madrid.
The United States’ victory in that conflict saw Spain cede sovereignty of Guam, Puerto Rico and the Philippines to the United States, while also paving the way for the U.S. annexation of Hawaii, at the time an independent nation. Trump — who has publicly repeated a desire to purchase Greenland from Denmark and retake the Panama Canal, despite widespread public skepticism — has cited the expansion of U.S. territories under McKinley as a triumph.