The whole aim of practical politics is to keep the public alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.
HL Mencken (1923)
1. a list or table of duties or customs payable on the importation or export of goods.
2. a duty on any particular kind of goods.
Hutchinson Educational Encyclopedia Dictionary (2000)
The new government of Warren Harding brought in two developments which are often attributed to 'isolationism' (although they had other causes). The first was to increase tariffs on foreign imports to protect American industry. The second was to restrict immigration.
Wilson believed in low tariffs. He had reduced tariffs in 1913, and refused to increase them.
Demand was growing, however, for higher tariffs (Source B). As soon as he became President, Warren Harding passed an Emergency Tariff (May 1921) to increase duties on food imports, and in 1922 Congress passed the Fordney-McCumber Tariff. This had two principles:
a. 'Scientific tariff': this linked tariffs to the wages in the country of export. If wages in, say Italy, were very low, then Italian goods were given a proportionately higher tariff. This negated the effect of lower wages in competitor countries.
b. 'American Selling Price': this linked tariffs to the price of American goods, not to the cost of production. A German company might be able to produce, say, a certain chemical for $60, but if the selling price in America was $80, and the US tariff was 50%, the tariff would be $40. This meant that foreign imports were ALWAYS more expensive than American-produced goods, however cheaply they had been made.
The Fordney-McCumber Act established the highest tariffs in history, with some duties up to 400% and an average of 40%.
An anti-tariff American cartoon of the time, linking the tariff to isolationism. The French man is saying: 'But Monsieur, where does it end'.
In the long-run, the Fordney-McCumber Act damaged the American economy, because other countries retaliated by putting up their duties and stopping American exports. However, for the moment, America was a huge new country, and there was plenty of demand at home.
If ever there was a time when Americans had anything to fear from foreign competition, that time has passed. If we wish to have Europe settle her debts, governmental or commercial, we must be prepared to buy from her.
Woodrow Wilson, speaking in March 1921
Wilson had just vetoed the Emergency Tariff Bill, just before he handed over the Presidency to Harding.