A Brief History of Tariffs in the United States
The United States had a very high tariff level through the 1800s and the beginning years of the 1900s. The tariff made goods from Europe more expensive in the U.S., and so these goods were rarely imported. Rather, customers in the U.S. purchased goods that were produced in the U.S., since these goods were cheaper because they didn't have the tariff added to their price. The Federal government also raised revenue from the tariff, reducing the need for a high income tax. A high tariff level was maintained more of less continuously until the GATT reforms after World War II.
The Effect of Tariffs on U.S. Manufacturing
The British colonies in America started as agricultural production areas. In the 1800s, compared on a pure cost of production basis, manufactured goods in the U.S. were more expensive than goods manufactured in Europe. Had the tariff not been present during the 1800s, American customers would have most likely only bought the cheaper imported European manufactures. The result of this would have been that America would not have developed widespread domestic manufacturing. Instead, America would have remained an agricultural economy, weak and unable to manufacture weapons to defend itself, provide for itself in the event of a blockade, and would not have grown into the industrial superpower that it became during the period 1875-1925. This is called the "infant industry" argument for tariffs, and it's correct. America became strong and prosperous by 1900 because of the high tariff levels which allowed America to develop widespread manufacturing.
The Effect of Manufacturing Jobs on the Standard of Living
Manufacturing allows the workers in the factory to produce more goods than the workers could have produced on their own because the machines in the factory do some of the work for the workers. Without the machines, the workers would have to produce goods with hand tools.
As technology became more sophisticated, with the help of machines, workers could produce many more goods in a day, sometimes 100 times as many or more. So where a worker before factories existed would only produce 1 good per 8 hour day, with machines the worker can produce 100 goods per 8 hour day.
The factory management in either case only needs to pay the worker the same wage for 8 hours, yet in the latter case the factory has received 100 times more value from the operation of the factory. It is this extra value that can be passed on the workers in the form of higher wages, safer working conditions, and employee benefits, with plenty of extra value left over for management and the investors. Manufacturing makes it possible for workers to enjoy a higher standard of living compared to how they lived in an agricultural economy.
