Tariffs. Tariffs are simply taxes o

Tariffs. Tariffs are simply taxes on foreign imports. Prior to World War II,U.S. tariffs on all imported goods averaged 30 to 50 percent in various decades. This suited U.S. manufacturers very well, eliminating most foreign competition from the U.S. market. U.S. firms enjoyed sheltered markets: they could raise prices to levels just below the price of imported goods with their high tariffs attached. Not only did this improve U.S. profit margins, but it also allowed U.S. firms that were less efficient than foreign producers to survive and prosper under the protection of tariffs. The pressure to cut wages and downsize work forces was less that it would be if U.S. firms had to face foreign corporations directly. American consumers,of course, paid higher prices than they otherwise would if foreign goods could enter the country without tariffs. But the U.S. steel, automobile, and electrical appliance industries grew powerful economically and politically.