Tariff (noun)

1. a list or table of duties or customs payable on the importation or export of goods.

2. a duty on any particular kind of goods.

Hutchinson Educational Encyclopedia Dictionary (2000)

(How) did tariffs help the American Economy grow?

One of the features of the American economic boom of the 1920s was tariffs – putting customs duties on imports in order to protect US industries from competition.

Fordney-McCumber Act, 1922

President Woodrow Wilson had believed in low tariffs; he had reduced tariffs in 1913, and refused to increase them.

Demand was growing, however, for higher tariffs (Source B). As soon as he became President, Warren Harding passed an Emergency Tariff (May 1921) to increase duties on food imports, and in 1922 Congress passed the Fordney-McCumber Tariff.

This had two principles:

‘'Scientific tariff': this linked tariffs to the wages in the country of export. If wages in, say Italy, were very low, then Italian goods were given a proportionately higher tariff. This negated the effect of lower wages in competitor countries.
‘'American Selling Price': this linked tariffs to the price of American goods, not to the cost of production. A German company might be able to produce, say, a certain chemical for $60, but if the selling price in America was $80, and the US tariff was 50%, the tariff would be $40. This meant that foreign imports were ALWAYS more expensive than American-produced goods, however cheaply they had been made.

The Fordney-McCumber Act established the highest tariffs in history, with some duties up to 400% and an average of 40%.

Source B

An anti-tariff American cartoon of the time, linking the tariff to isolationism. The French man is saying: 'But Monsieur, where does it bend'. (See here for a better-quality image.)

In the long-run, the Fordney-McCumber Act damaged the American economy, because other countries retaliated by putting up their duties and stopping American exports. However, for the moment, America was a huge new country, and there was plenty of demand at home.

Source A

If ever there was a time when Americans had anything to fear from foreign competition, that time has passed. If we wish to have Europe settle her debts, governmental or commercial, we must be prepared to buy from her.

Woodrow Wilson, speaking in March 1921
Wilson had just vetoed the Emergency Tariff Bill, just before he handed over the Presidency to Harding.

Source B

Why Americans wanted high tariffs [WAIF]

Tariffs stop imports!

Wartime boom: American business had boomed during the war - possibly because the countries involved in the war hadn't been able to sell goods to America - and American businessmen wanted this to continue.
American wages: American wages were rising, and American businessmen feared that low wages in Europe would allow European firms to undercut them. Thus Joseph Fordney claimed that tariffs would protect American workers' jobs.
Isolationism: American isolationists wanted America to be self-sufficient .
Farm Bloc: Overproduction was causing a depression in farming. Farmers hoped that protection would help keep prices up.

Consider:

Is the Fordney-McCumber Act an example of 'isolationism'?.