Goodbye, Old West: How 1921 U.S. Protectionism Nearly Derailed Nike's Rise
- By Lutz Meier
- ⏱️ 2 minutes read
Impact of 1921 US Tariffs Threatening Nike's Initial Growth - US Trade Barriers in 1921 Nearly Hinder Nike's Emergence
In the aftermath of World War I, a wave of nationalism, isolation, and protectionism swept across the United States, paving the way for the Republican Party's dominance. Even before Warren G. Harding took office in 1921, two Republican congressmen introduced the Fordney-McCumber Tariff Act, which became law in 1922. This legislation hiked tariffs to an average of 38.5%, among the steepest globally.
Protectionism
- Barriers to Import
- Economic Isolationism
- 1920s America
The Iron Curtain
The 1921 Fordney-McCumber Tariff Act was a cornerstone of U.S. protectionist policy, erecting a significant barrier against imported goods. This tariff regime was just one facet of a broader U.S. economic insularity from post-WW1 to the Great Depression.
Nike: Born in a Protected Land
Nike, initially established as Blue Ribbon Sports in 1964 and renamed Nike in 1971, emerged well after the Fordney-McCumber Tariff Act. Thus, the immediate impact of this 1921 tariff on Nike's early growth was limited by the considerable time gap.
Before the Rain
The Fordney-McCumber Tariff was symptomatic of 1920s America's broader protectionist stance, which influenced trade policies for many years, including those overlapping with Nike's formative years. Protectionist strategies often made imported goods costlier, inciting domestic production and supporting the growth of U.S. manufacturers, such as in the footwear industry.
The Storm of the Century
The tariff helped fuel trade disputes and economic strife during the Great Depression by prompting retaliatory tariffs overseas, reducing exports, and worsening the economic downturn. This tumultuous economic climate shaped the challenging business landscape Nike would enter later, characterized by frugal consumers and a robust domestic manufacturing sector.
The Present and Beyond
Modern tariffs, such as the 2025 price hikes announced by Nike due to protectionist trade policies, demonstrate the continuous effect of such measures on Nike's pricing and supply chain decisions. However, these contemporary tariffs are markedly different from those enacted in 1921.
In conclusion, while the 1921 Fordney-McCumber Tariff Act predated Nike by several decades and did not have a direct influence on its initial growth, it represented the era's U.S. protectionism that set the stage for the manufacturing conditions in which Nike was conceived. Protectionist policies, like those exemplified by the Fordney-McCumber Tariff, played a crucial role in shaping the U.S. economic landscape and promoting the growth of domestic manufacturers, influencing Nike's emergence indirectly. Furthermore, the Great Depression’s economic repercussions, partly engendered by such tariffs, presented significant challenges for American businesses of the time. Although Nike's more substantial tariff-related challenges have surfaced in recent decades, trade policy remains a relevant factor in its operations [1][2][3].
- The 1921 Fordney-McCumber Tariff Act, a cornerstone of the U.S. community policy on protectionism, set a significant barrier against imported goods, reflecting the economic isolationism of 1920s America.
- In the footwear industry, protectionist strategies incited by policies like the Fordney-McCumber Tariff supported the growth of U.S. manufacturers, indirectly influencing the emergence of companies like Nike.
- Protectionist policies, such as the Fordney-McCumber Tariff and contemporary tariffs, in both the 1920s and present day, impact the pricing and supply chain decisions of companies like Nike, as well as the overall financial landscape of the industry and business.
