Tariffs have a long history in the US – two charts tell that story

Published

7 months ago

January 22, 2025

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There’s a chart that’s been doing the rounds in recent weeks – American businessman Marc Andreessen tweeted it, and then it was reposted by Donald Trump himself.

The chart is pretty simple: it shows the proportion of American federal government revenues coming from tariffs, going all the way back to the early days of American independence.

And to glance at, it tells a compelling story. For nearly all of the 19th century, tariffs imposed on goods imported into America provided more than half the government’s revenues.

The president’s interpretation was as follows: “The tariffs, and tariffs alone, created this vast wealth for our country. Then we switched over to income tax. We were never so wealthy as during this period. Tariffs will pay off our debt and, MAKE AMERICA WEALTHY AGAIN!”

Money blog: New tax rises now ‘a good bet’ for 2025

The first half of his post is quite true. America’s federal economy was largely built on revenues from tariffs. When Alexander Hamilton was designing much of the federal infrastructure, not to mention paying the debts from the War of Independence, he chose to fund it with tariffs and duties on goods imported to the country.

Revenue wasn’t the only reason for the tariffs. They were there, too, to protect the country’s nascent industries. But those tariffs were the main source of income for a long time. What changed? Well, from the late 19th century onwards, the size of the American state expanded. Paying for the Civil War was expensive; funding a growing welfare state and national infrastructure in the following decades likewise.

But tariffs can only go so far. There is only so high one can lift these fees before they begin to stifle activity, making goods so expensive to import that domestic consumers face economic damage. That brings us back to the data in the chart approvingly cited by the president.

Take the same numbers and divide them by GDP – the total size of the US economy – another way of skinning it (indeed, the way you’d normally look at long-run historical figures like this). Now everything looks somewhat different. You can see that at no point in American history – even in those early days when tariffs were far higher than today and a far more important source of revenues – did the total amount they raised exceed 6% of gross domestic product. This is not accidental.

It was because tariffs couldn’t raise enough to finance the Federal administration that successive administrations began to collect other taxes on American citizens rather than imports, starting with excise taxes and income taxes in the Civil War. Those taxes, collected by the Internal Revenue Service, ballooned in the following decades – as did the size of the state.

Today the American federal budget is orders of magnitude bigger than two centuries ago (albeit still much smaller than those you find in Europe). The new administration has made it an explicit policy to cut back on waste, led in part by Elon Musk and his DOGE (the Department of Government Efficiency, whose name was seemingly chosen in order to fulfil Mr Musk’s ambition to turn everything into a meme). But there are limits to how far one can cut: a superpower with a large military, vast infrastructure networks such as road and rail, not to mention public health and education systems, does not come for free.

Even so, raising revenue is just one purpose of tariffs. They can also be used as a negotiating tool with other countries (indeed, this might well be their main function in the hands of Mr Trump). They can be used to protect domestic industries against competition.

Whatever the purpose, after decades of relatively free trade around much of the world – most notably America itself – we are living now in an era where tariffs are back. And this story has only just begun.

US

Trump says he hopes to get ‘prime territory’ back for Ukraine as he prepares for Putin summit

Published

8 hours ago

August 12, 2025

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Trump says he hopes to get 'prime territory' back for Ukraine as he prepares for Putin summit

Donald Trump has said he would try to return territory to Ukraine as he prepares to meet Vladimir Putin and lay the groundwork for a deal to bring an end to the war.

“Russia has occupied a big portion of Ukraine. They’ve occupied some very prime territory. We’re going to try and get some of that territory back for Ukraine,” the US president said at a White House news conference ahead of Friday’s summit in Alaska.

Mr Trump also said: “There’ll be some land swapping going on. I know that through Russia and through conversations with everybody, to the good of Ukraine.”

He said he’s going to see what Mr Putin “has in mind” to end the three-and-a-half-year full-scale invasion.

And he said if it’s a “fair deal,” he will share it with European and NATO leaders, as well as Volodymyr Zelenskyy, who have been liaising closely with Washington ahead of the meeting.

Asked if Mr Zelenskyy was invited to the summit with Mr Putin in Alaska, Mr Trump said the Ukrainian leader “wasn’t a part of it”.

“I would say he could go, but he’s gone to a lot of meetings. You know, he’s been there for three and a half years – nothing happened,” Mr Trump added.

The US president said Mr Putin wants to get the war “over with” and “get involved” in possible talks but acknowledged Moscow’s attacks haven’t stopped.

“I’ve said that a few times and I’ve been disappointed because I’d have a great call with him and then missiles would be lobbed into Kyiv or some other place,” he said.

Mr Trump said he will tell Mr Putin “you’ve got to end this war, you’ve got to end it,” but that “it’s not up to me” to make a deal between Russia and Ukraine.

Zelenskyy says Russia ‘wants to buy time’

Ukrainian President Volodymyr Zelenskyy has said Russia “wants to buy time, not end the war”.

“It is obvious that the Russians simply want to buy time, not end the war,” he wrote in a post on X, after a phone call with Canada’s Prime Minister Mark Carney.

“The situation on the battlefield and Russia’s wicked strikes on civilian infrastructure and ordinary people prove this clearly.”

Mr Zelenskyy said the two “agreed that no decisions concerning Ukraine’s future and the security of our people can be made without Ukraine’s participation”, just as “there can be no decisions without clear security guarantees”.

Sanctions against Russia must remain in force and be “constantly strengthened,” he added.

European leaders meet ahead of call with Trump

Meanwhile, European officials have been holding meetings ahead of a phone call with Mr Trump on Wednesday.

The European Union’s foreign policy chief, Kaja Kallas, has been speaking to foreign ministers virtually, saying on X that work “on more sanctions against Russia, more military support for Ukraine and more support for Ukraine’s budgetary needs and accession process to join the EU” is under way.

Over the weekend, European leaders released a joint statement, welcoming Mr Trump’s “work to stop the killing in Ukraine”.

“We are convinced that only an approach that combines active diplomacy, support to Ukraine and pressure on the Russian Federation to end their illegal war can succeed,” read the statement.

It was signed by UK Prime Minister Sir Keir Starmer, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, German Chancellor Friedrich Merz, Polish Prime Minister Donald Tusk, Finland’s President Alexander Stubb, and European Commission President Ursula von der Leyen.

“We underline our unwavering commitment to Ukraine’s sovereignty, independence and territorial integrity,” they said.

Attacks continue

Despite Donald Trump’s efforts to convince Vladimir Putin to commit to a ceasefire and negotiations, Russian attacks on Ukraine have only intensified in the past few months.

Ukraine’s president has said that, in the past week, Russia launched more than 1,000 air bombs, nearly 1,400 drones and multiple missile strikes on Ukraine.

On 9 July, Russia carried out its largest aerial attack on Ukraine since the start of the war, launching more than 740 drones and missiles, breaking its records from previous weeks.

Furthermore, Mr Zelenskyy has said Russia is preparing for new offensives.

US

Trump gaffe reveals how central Putin is to his narrative – with Zelenskyy left out in the cold

Published

10 hours ago

August 11, 2025

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Trump gaffe reveals how central Putin is to his narrative - with Zelenskyy left out in the cold

And then there were two.

It will be a Trump-Putin bilateral summit in Alaska.

Ukraine latest: Trump details talks with Putin

The US president has ruled out a trilateral meeting including Volodymyr Zelenskyy and is framing the talks as low stakes.

He described it as a “feel out” meeting “to see what the parameters” are, and stressed “it’s not up to me to make a deal.”

A strategic preemption perhaps, setting expectations low, and preparing the public for failure.

But he remains wedded to the notion that “land swapping” will shape any deal to end the war in Ukraine.

“Good stuff” and “bad stuff” for both sides, he said, positioning himself as the pragmatic mediator between the two.

He expressed irritation with Mr Zelenskyy’s assertion that he doesn’t have the constitutional power to concede land, though did say he hopes to get “prime territory” back for Ukraine.

The dealmaker-in-chief

Mr Trump promised to brief the Ukrainian president and European leaders immediately after his meeting with Mr Putin.

And he voiced confidence in his ability to quickly assess the potential for a deal, boasting his business acumen.

“At the end of the meeting, probably the first two minutes, I’ll know exactly whether or not a deal can be made,” he said.

Asked how he would know, he replied: “That’s what I do, make deals.”

Members of his cabinet nodded in approval.

Read more:
Why Trump will have a lot of ice to break

A law-and-order crackdown in the US capital seems timed to bolster his diplomatic stance.

He branded crime in Washington “a national emergency”, took federal control of police and deployed the National Guard.

It may seem strange that Mr Trump is talking about “taking back” Washington, ahead of a rare summit with Mr Putin.

But he’s positioning himself as bold and uncompromising before he faces a man deemed bold and uncompromising.

A telling gaffe

And he conflated the two, saying: “This is a tragic emergency, and I’m going to see Putin, I’m going to Russia on Friday.”

He isn’t going to Russia. He’s going to Alaska. But that gaffe revealed how central Mr Putin is to his narrative, even domestically.

Mr Putin wants to lock in the gains Russia has made since invading Ukraine, while Mr Trump presses for a ceasefire.

But it’s hard to envisage any ice-breaking peace deal emerging from Friday’s summit in Alaska.

How could there be when Mr Zelenskyy is out in the cold?

For now, this is a Trump-Putin power play.

US

Donald Trump will deploy National Guard troops to Washington DC to ‘re-establish law and order’

Published

14 hours ago

August 11, 2025

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Donald Trump will deploy National Guard troops to Washington DC to 're-establish law and order'

Donald Trump has announced he is going to deploy National Guard troops to Washington DC to make the US capital’s streets safer.

At a White House news conference on Monday, the president said the city’s police would come under federal control as he said the murder rate in DC was “higher than” in some of the “worst places on earth”.

He said he was sending in the troops to “re-establish law, order, and public safety”.

Mr Trump said he was announcing a “historic action to rescue our nation’s capital from crime, bloodshed, bedlam and squalor and worse.

“This is liberation day in DC and we are going to take our capital back.”

The president continued: “So today we are declaring a public safety emergency in the district of Columbia.”

He added it is not just about safety but also the “beautification” of the city.

“Washington DC should be one of the safest, cleanest and most beautiful cities anywhere in the world and we’re going to make it that.”

Last week, the Republican president directed federal law enforcement agencies to increase their presence in Washington for seven days, with the option “to extend as needed”.

On Friday night, federal agencies including the Secret Service, the FBI and the US Marshals Service assigned more than 120 officers and agents to assist in Washington.

National Guard troops usually belong to individual states and personnel in many cases are trained to help with emergencies that those states have to deal with, such as natural disasters.

Since they are the reserve force of the US military, National Guard troops are usually part-time, meaning that they have other jobs as well.

Minority leader of the US House of Representatives, Hakeem Jeffries, responded to Mr Trump’s announcement on Monday with a post on X which read: “Violent crime in Washington, DC is at a thirty-year low.

“Donald Trump has no basis to take over the local police department. And zero credibility on the issue of law and order.

“Get lost.”

In a social media post on Sunday, Mr Trump emphasised the removal of Washington’s homeless population, though it was unclear where the thousands of people would go.

“The Homeless have to move out, IMMEDIATELY,” Mr Trump wrote.

“We will give you places to stay, but FAR from the Capital. The Criminals, you don’t have to move out. We’re going to put you in jail where you belong.”