NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Could the U.S. Iron Industry Have Survived Free Trade After the Civil War?

Douglas A. Irwin

NBER Working Paper No. 7640
Issued in April 2000
NBER Program(s):   DAE   ITI

An unresolved question concerning post-Civil War U.S. industrialization is the degree to which import tariffs protected domestic manufacturers from foreign competition. This paper considers the impact of import tariffs on the domestic pig iron industry, the basic building block of the entire iron and steel industry. After reviewing the contentious political debate surrounding the pig iron duties and estimating the elasticity of substitution between domestic and imported pig iron, a standard trade model provides estimates of how tariff reductions would affect domestic prices, production, imports, and welfare. The results suggest that, had the tariff been eliminated in 1869, domestic output would fall by about 15 percent and the import market share would rise from about 7 percent to nearly 30 percent. These relatively modest effects suggest that a substantial portion of the domestic industry could have survived a significant tariff reduction.

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Document Object Identifier (DOI): 10.3386/w7640

Published: Irwin, Douglas A. "Could The United States Iron Industry Have Survived Free Trade After The Civil War?," Explorations in Economic History, 2000, v37(3,Jul), 278-299.

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