The Rushford Report Archives
The World’s Oldest Infant Industry
June, 2003: The Yankee Trader
By Greg Rushford
Published in the Rushford Report
Here’s a thumbnail history. Besides my own research, this article relies upon a historical chronology included in a 1990 study for U.S. importers and retailers written by Washington trade lawyers Frank Samolis and Jeffrey Turner, with the assistance of economist Laura Baughman: Two Centuries of Textile Trade Policy: From Button Tariffs to Global Quotas.
On July 4, 1789 in one of its first acts, Congress enacted tariff barriers on imports including cotton, leather, clothing, gloves, and hats (whether made of beaver, fur, or wool). Even foreign buttons were taxed, although the origins of the domestic button lobby remain obscure.
In 1883, Congress established a tariff commission. A wool lobbyist named John L. Hayes was the commission’s first head.
In 1930, thanks to the Smoot-Hawley Act, “the average
In 1955, according to Townsend Hoopes’ The Devil and John Foster
Dulles, a history of diplomacy in the Dwight Eisenhower presidency,
Secretary of State Dulles offered American financing to build the Aswan
High Dam in
(fifteen to eighteen years thence) intensify a trade
competition already tougher than their liking,” Hoopes reported. Ike was
recovering slowly from a heart attack, and had neither the energy nor the
political desire to fight the cotton boys. After Dulles abruptly withdrew
the American financing offer,
Fast forward to today, and the Textile Caucus’s successful
opposition to the requests to President George W. Bush to give
In 1956, Congress again pressed Ike to limit textile and apparel
imports. “The textile industry does not seek favors, but does ask, Mr.
President, that the additional burden of ever-increasing imports not be
added to its other troubles,” Republican Sen. Frederick G. Payne of
In the 1960s,
The protectionist pressures intensified during President Richard Nixon’s years in the White House. As part of his southern strategy in his 1968 campaign, Nixon had promised that if elected he would curb imports of textiles and apparel. “Textile industry leaders raised a considerable sum which was used to run a special operation in key Southern states, all of which were carried except Georgia,” noted a June 4, 1970 memo to the president from two key Nixon aides, congressional relations lobbyist William Timmons and Republican political operative Harry Dent (see, Trade history as Déjà vu, The Rushford Report, February 2003).
Nixon, like other politicians, put economics second. On
But while the textile lobby had long ago run out of an economic case, it had a political case.
The Multifibre Arrangement of quotas that was initiated by President Richard Nixon in 1974 was supposed to last for three or four years. Instead, there have been four extensions.
In 1985, lobbyists for the domestic textile and apparel industry warned that if they did not receive more protection, “in five years our entire industry and four million jobs that depend on it will simply cease to exist.” Responding the next year, President Ronald Reagan’s administration “negotiated the toughest renewal ever of the Multifibre Arrangement, extending its coverage to virtually all textile and apparel products,” according to the Samolis-Turner-Baughman study.
Following up, Reagan pressed “tougher, more restrictive bilateral restraint agreements with all the major developing market suppliers to the United States, including China, Hong Kong, Taiwan, and Korea,” the study noted. Between 1985 and 1989, Reagan’s team “called” nearly 400 product categories, slapping on new quota limits on imports that covered more than three quarters of all textile and apparel imports.
More than eighty percent of those quotas will continue to exist
until finally phased out on
Over the years, first Japan, then Hong Kong, South Korea, and
Singapore — all targets of the U.S. textile lobby in the 1960s, 1970s,
and 1980s — developed their economies far beyond the rag trade and moved
up the ladder. But in southern states like North and
Meanwhile, the Republican congressman who represents
All this protection, at the end of the day, has not saved the mill towns from dying — slowly. Over the years, the only jobs that have really been saved by the continuing protectionist machinations have been those of the politicians who have found it expedient to push them.