The Cayley–Galt Tariff of 1858 was the first

protective tariff Protective tariffs are tariffs that are enacted with the aim of protecting a domestic industry. They aim to make imported goods cost more than equivalent goods produced domestically, thereby causing sales of domestically produced goods to rise, ...

in the history of

Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...

. It imposed duties on fully-manufactured goods of 20% and a duty of 10% on partially-manufactured goods in an attempt to spur the domestic manufacturing industries. The tariff caused immediate resentment in both the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...

and the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

. The Americans' anger played an important role in their 1866 repeal of the

Canadian–American Reciprocity Treaty The Canadian–American Reciprocity Treaty of 1854, also known as the Elgin-Marcy Treaty (after its key negotiators, James Bruce, 8th Earl of Elgin and William L. Marcy), was a treaty between the United Kingdom and the United States that applied ...

, which had led to

free trade Free trade is a trade policy that does not restrict imports or exports. In government, free trade is predominantly advocated by political parties that hold Economic liberalism, economically liberal positions, while economic nationalist politica ...

in natural resources. The

tariff A tariff or import tax is a duty (tax), duty imposed by a national Government, government, customs territory, or supranational union on imports of goods and is paid by the importer. Exceptionally, an export tax may be levied on exports of goods ...

was only a foretaste of the much broader system of protection, which would be set up by the

National Policy The National Policy was a Canadian economic program introduced by John A. Macdonald's Conservative Party in 1876. After Macdonald led the Conservatives to victory in the 1878 Canadian federal election, he began implementing his policy in 1879. ...

in 1879.

Sources

*W.T. Easterbrook and H.G.J. Aitken. ''Canadian Economic History'' (Toronto, 1988) {{DEFAULTSORT:Cayley-Galt Tariff Financial history of Canada