Ancient Athens charged two percent at the docks; Britain later pushed tariffs past 45
Goods landing at Piraeus, the port of classical Athens, paid a two percent levy. Two millennia later Britain, now remembered as the champion of free trade, taxed imported manufactures at an average of 45 to 55 percent. The history of tariffs is full of such reversals.
A tariff is a duty on imported goods, paid by the importer, though some governments also tax exports. Rates may be fixed per unit, a set percentage of price, or vary with price. Besides raising revenue, tariffs make foreign products dearer so buyers switch to local ones, and they have long been defended as shelter for young industries, a path to replacing imports with home production, or a counter to dumping, export subsidies and currency manipulation. The word travelled from the Arabic ta'rif, a proclamation or notice, reaching European languages, first Italian, in the 16th century through Levant trade as a term for a list of prices or duties.
England's rulers used trade policy aggressively. Edward III banned imported woollen cloth in the 14th century to nurture local weaving, Henry VII raised export duties on raw wool from 1489, and the Tudors, notably Henry VIII and Elizabeth I, added subsidies, monopolies and even state-backed industrial espionage. In 1721 Robert Walpole raised duties on foreign manufactures, cut them on imported raw materials and subsidised exports, making Britain one of the first countries to pursue large-scale infant-industry development.
The Corn Laws of 1815 kept grain prices high to benefit landowners, raising food costs and squeezing spending on everything else. Their repeal in 1846 is seen as Britain's decisive turn toward free trade, and a 2021 study found the bottom 90 percent of earners gained while the top 10 percent lost income.
Economists today almost all agree that tariffs are self-defeating and slow growth, whereas lowering trade barriers helps it. Milton Friedman quipped that a protective tariff does protect: it shields consumers from low prices. The cost lands on importers, exporters and consumers, and protection can backfire on the very industries it targets through dearer inputs and retaliation abroad. Freer trade can still hurt particular workers in the short run, and its gains are not always shared evenly.
Source: Tariff
