To be fair to protectionism, America only really got into free trade during Grover Cleveland's two non-consecutive terms, and even them they were only marginal and ineffective. Only in the 20's did it start showing up again and Calvin Coolidge was against lower tariffs. It was a major Republican belief up until the second world war. If protectionism prevented business from doing business, then it is hard to see how the United States was able to decisively enter world war one or two. During McKinley's administration the budget was doing so good he actually raised the tariff to reduce the money the fed was taking in [because back in those days our government was run only on tariff revenue] and so it worked while also acting as an incentive to move factories to the U.S. and build in the U.S. The trick of protectionism is that it says you can be a foreign company, and as long as you produce in the U.S. you can keep your money. So instead of moving one factory to another location, you build another factory to supplement the first one. Pure protectionism doesn't work and I personally prefer fair trade, but I had to take a protectionist stance for the sake of argument.
There wasn't a "fed" in the 1890's. Are you talking about the Federal Gov't?
Also the sentence doesn't seem to make sense.
Any positive that tariffs created in terms of "protecting infant industry" was gone by the 1880's. The McKinley tariff was motivated entirely by misguided economics and by politics. When it failed, the people turned against it and business interests that had long supported protectionism, began to increasingly call for free trade as a way to pickup any slack demand and avoid another 1893-1896 Depression. Mckinley himself voiced sympathy for this in his last speech, before he was shot. Subsquent GOP support for tariffs was motivated by politics.
A good example of how the US was damaged by Smoot-Hawley was Ford. Italy was a prime overseas market for Model T's and subsequent Ford products. For 10 years Fiat had been asking for tariffs to drive the Fords out and Mussolini laughed them off every time. Until 1930 that is. In retaliation to our tariffs, Italy and every other country passed retalitory tariffs. The Fords were driven out and Fiat got to sell thousands of crappy cars to people in Italy. The US got several thousand more laid off in Detroit, at a time when the US economy didn't need any more layoffs. These were followed by layoffs in Pittsburg, Duluth and West Virginia as it cascaded through the supply chain. Cars, to steel, to iron and coal.
The depth of the Depression was mostly a monetary failure by the Fed to ensure proper liquidity in the banking sector, thus contributing to the bank failures. However, the tariff crippled US export industries, like the auto companies at the time. The Depression idled the factories, but they were still there and thus there use in the War. But the tariff did hurt the economy, and extend the length and depth of the Depression. It also contributed to the war by causing world trade to collapse.
The greatest time for the US economy and for auto companies, was the 1950's and 1960's. During that period, you had tariffs reach their lowest points as a result of post-war multilaterial trade liberalization.
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