In 1890, two landmark bills passed and were signed into law by Republican president Benjamin Harrison. That year, both the Sherman Antitrust Act and the McKinley Tariff simultaneously defined American antitrust law and established a historic tariff to protect American producers. This was no coincidence. For Republicans in the post-Civil War era, tariffs and industrialization were top priorities—but protectionism risked creating or strengthening industrial monopolies by insulating domestic firms from foreign competition. The discipline once provided by foreign firms needed to come from elsewhere: antitrust enforcement.
The U.S. is facing a similar challenge today: Tariffs are back after years of globalization let our antitrust muscles go soft, as the enforcer’s job was done by foreign competitors, with considerable consequences. In agriculture, for example, tariffs have walled off the economy from foreign imports and therefore muted competition for key inputs including fertilizers and equipment, putting the squeeze on America’s farmers. Across the economy, the same antitrust logic that applied in the Gilded Age applies today: tariffs and trustbusting must go hand-in-hand.
If imported products become more expensive because of tariffs, the thinking went, domestic producers would face less pressure to lower prices, innovate, or expand output. This logic built the case for antitrust enforcement against some of the most powerful companies in the country at the time, including Standard Oil, U.S. Steel, and the meatpackers. For Republicans, antitrust was the pragmatic response to the inevitable loss of competition created by the tariffs. Indeed, some historians argue the first antitrust law, the Sherman Act of 1890, partly functioned as a political safety valve, allowing Republicans to preserve the tariff system while responding to popular anti-monopoly sentiment.
President Harrison was an early advocate for both tariffs and antitrust. In his 1889 annual message to Congress, he argued that America needed protective tariffs to build domestic industry, but once shielded from foreign competition domestic industry needed to compete fairly. According to Harrison, “combinations and monopolies” threatened competition, but tariff policy and antitrust policy should be held separate.
“Earnest attention should be given by Congress to a consideration of the question how far the restraint of those combinations of capital commonly called ‘trusts’ is a matter of Federal jurisdiction,” he told Congress. Harrison described monopolistic combinations in unusually strong, even moralistic, language. “When organized, as they often are, to crush out all healthy competition and to monopolize the production or sale of an article of commerce and general necessity,” he said, “they are dangerous conspiracies against the public good, and should be made the subject of prohibitory and even penal legislation.” For Harrison, not only were monopolies inefficient in economic terms, but also contrary to the “public good.”
By 1890, Republicans had successfully framed antitrust enforcement as a necessary complement to tariffs. Although Harrison was no Teddy Roosevelt, he laid the conceptual building blocks for future trust-busters: making clear that economic concentration threatens democracy; monopoly suppresses competition; and the federal government must respond to both threats..
Following in Harrison’s pragmatic footsteps, President William McKinley was one of the leading protectionists of the era and the principal architect of the so-called McKinley Tariff. McKinley consistently defended tariffs as a labor policy, a nation-building policy, and a mechanism for industrial independence, but he also recognized the political danger that trusts and concentrated economic power posed.
The relationship between tariffs and antitrust was baked into Republican economic policy in the late nineteenth and early twentieth centuries, but as global free trade became the norm and tariff barriers were torn down, foreign imports constrained domestic prices and antitrust enforcement started to be seen as superfluous.
The process did not happen overnight—it needed an architect to overcome decades of orthodoxy. Those came in the form of Robert Bork and the ascendant Chicago School of Law and Economics, whichchallenged antitrust’s core assumptions as it leaned into the idea that Big Can Be Beautiful, and its thinking came to dominate federal antitrust policy at the Federal Trade Commission and the Department of Justice (DOJ) Antitrust Division from the 1980s onward. This intellectual shift in antitrust combined with the growth of global free trade shifted Republican orthodoxy away from the pragmatic symbiosis between tariffs and antitrust toward a new, more laissez faire approach to antitrust whichreached its zenith during the globalization era that followed the Cold War as the U.S. tilted toward unrestrained global free trade. This shift changed antitrust analysis in important ways. In merger cases, courts and agencies asked whether, absent tariffs, foreign imports disciplined domestic firms, and found that in many cases they did. With the rise of China as an exporting behemoth in the 2000s, foreign imports became a real and serious constraint on U.S. domestic competition.
In 2005, the household appliance businesses of Whirlpool and Maytag announced their intention to merge. Many thought the merger would raise antitrust concerns, but the DOJ concluded that evidence of foreign imports from China, Mexico, and other free trade zones was so strong that the merger was unlikely to lessen competition in meaningful ways. The DOJ’s press release announcing its decision provides a bird’s eye view of the interplay between antitrust and free trade at that moment of peak globalization.
According to the DOJ, not only did Whirlpool and Maytag manufacture many products for sale in North America in Mexico, so did everyone else thanks to NAFTA. Not only that, big box retailers such as Best Buy and The Home Depot freely imported large volumes of products from LG and Samsung, both Asian manufacturers. LG in particular was found to have “grown to a significant volume of sales at Best Buy and The Home Depot in a short period of time.” Tariffs and antitrust enforcement declined in tandem.
The shift in trade policy that began in the Trump era could have inspired Republicans to pragmatically embrace antitrust as they did in the 1890s, accepting its necessary role in ensuring domestic competition.But they did not; at least not at first. Instead, the first Trump administration’s antitrust agencies carried forward the Chicago School laissez-faire model, and tariffs, industrialization, and antitrust remained siloed.
This changed when the Biden administration promoted the neo-Brandeisian school at the antitrust agencies, understanding that a lack of import competition—whether from tariffs or global supply chain shocks—can entrench domestic oligopolies and monopolies. They argued that reduced import competition increased the need to police domestic consolidation more aggressively and took a skeptical stance on mergers.
The Trump administration’s second-term tariff policies underscore the need for antitrust vigilance in key sectors—in particular, agriculture. Farmers and ranchers see the need for antitrust vigilance, and these groups are politically important to the Trump governing coalition. They argue that the twin logic of tariffs and antitrust should apply to the agricultural sector since tariffs have been particularly impactful on U.S. farmers’ and ranchers’ ability to afford key inputs such as fertilizer, machinery, chemicals, and fuel-related products.
Fertilizer remains the biggest concern for most farmers and many ranchers. The U.S. is heavily dependent on imported fertilizer inputs, especially potash from Canada, although the USDA has in recent months taken active steps to boost domestic production. Canada supplies more than 80% of U.S. potash imports, so even the threat of tariffs has rattled the agricultural sector. Some fertilizer products have been granted partial exemptions, but farmers continue to struggle with high fertilizer prices.
Seeds are less affected by tariff policy because many are produced domestically but farmers still worry about concentration in the seed market, which foreign-owned corporations dominate in part due to a merger wave during the Trump 45 administration. Compared to fertilizer and machinery, seed imports have remained relatively stable. Here too, farmers are calling for antitrust intervention that would shield domestic production from further market concentration.
The administration has gradually responded. Last September, the DOJ and USDA announced a joint Memorandum of Understanding to investigate rising farm input costs, including fertilizer, seed, fuel, and equipment markets. The DOJ recently announced a deal with Bayer to remove certain restrictions from seed supply agreements with farmers and independent seed companies, but the terms of the deal remain opaque to industry observers. And the USDA is working to reshore fertilizer production through its Fertilizer Production Expansion Program. The USDA is fast-tracking approvals along with the EPA for fertilizer production plants. In the meantime, however, farmers face high input prices.
America’s ranchers are also impacted by tariff and antitrust policies, and ranchers are hugely important to the Trump governing coalition. As in the Gilded Age, ranchers feel beholden to meat packers, principally Tyson Foods, Cargill, JBS, and National Beef Packing Company. These firms reportedly control between 80% and 85% of U.S. beef processing capacity and, according to the ranchers, the packers flex their buyer power to drive down rancher margins. At the same time, the U.S. cattle herd is at its lowest level since the early 1950s after years of drought, high feed costs, and ranchers selling off the family business out of financial necessity, pushing beef prices higher on the supermarket shelf. The ranchers claim that it is the packers’ buyer power that is suppressing prices paid to ranchers, and the packers’ seller power that results in higher prices on supermarket shelves. Ranchers have called for antitrust investigations into this phenomenon for several years now, and absent government action, have resorted to private antitrust litigation in several courts and states.
The White House is under political pressure from the well-organized ranchers and lesswellorganized consumers who face affordability issues heading into the midterm elections. The administration has tweaked tariff-rate quotas and increased imports from countries like Brazil, Argentina, Australia, and Canada to ease consumer pricing, but the heat has not left the issue. The White House’s economic logic is wrong per se. More imported beef lowers prices, increases supply, and relieves pressure on consumers’ pocketbooks. However, many U.S. ranchers oppose expanded imports because they fear foreign competition, they distrust Brazilian and Argentine sanitary and labeling standards, and they believe imports weaken domestic producers at a time when they are working to rebuild the national herd.
Amid this seemingly intractable problem, a political coalition—ranchers plus antimonopoly conservatives plus economic populists—is driving a renewed antitrust focus in the tradition of the Gilded Age Republicans. Last November, the DOJ opened an antitrust investigation into the meatpacking industry. The latest development in the investigation includes bringing supermarket retailers into the fray.
Could it be that prices are higher to consumers because of the supermarkets rather than the meat packers? It is hard to tell, and the DOJ has asked for data and documents on a voluntary basis, not issuing a subpoena. The supermarkets will politely point out that their margins on beef have not exactly increased in recent times, which more than suggests that someone else is making the profit in the supply chain, and it is not the ranchers. As to the Big Four meat packers, based on public reporting the focus includes possible collusion in cattle purchasing, coordination on slaughter capacity, price manipulation, and broader meat-packer buyer-power concerns.
The fusion between trade policy and antitrust enforcement illustrated by this investigation and the coalition behind it harkens back to the early days of antitrust. Time will tell if this DOJ will follow in the footsteps of Harrison, McKinley, and Roosevelt, or chart a different course heading into the midterms.
Boy oh boy do we need to ramp up antitrust actions. Corporate consolidation has gone way off the rails and is no longer the argument for increased customer value from economies of scale. The lack of competition is resulting in profit taking and caprification of products and services.
What we need is some legislation that we should call the Make America Competitive Again act. We need to set some new benchmarks for maximum market share owned by large corporations vs small business, and limit Wall Street control of the public corporations.