You may discount DiLorenzo for whatever reason, but what he writes regarding nineteenth century economics simply can't be ignored. This excerpt from one of his articles helps to explain a couple of additional ways the high tariff hurt the Southern economy outside of causing higher prices on purchases:
"It has long been understood by economists that import tariffs impose a disproportionate burden on export-dependent regions. And even McPherson admits that the South in 1860 exported about 60 percent of what it produced (others have estimated it as being closer to 75 percent). As Wilson Brown and Jan Hogendorn explain in their popular textbook, International Economics (p. 121), a tax on imports is effectively a tax on exports as well. This is because after a tariff causes the price of certain goods to rise,
. . . consumers . . . include the . . . price increases in their wage and salary demands. Everybody tries to pass the tax to someone else. The only group that is powerless to pass the costs on further are the exporters, who have to sell at world prices and swallow these costs. In essence, a tax on imports becomes a tax on exports (emphasis added).
International trade economists call this the "pass-through effect" of a tariff. Unlike McPherson and Poulter, early nineteenth century Southerners understood this perfectly well because they observed how their incomes fell whenever tariff rates rose. As John C. Calhoun explained in a September 1, 1828 letter to Micah Sterling of Watertown, New York regarding his opposition to the Tariff of Abominations, a protectionist tariff "gives to one section [the North] the power of recharging . . . the duty, while to the other [the South] it is a pure unmitigated burden." This is so, wrote Calhoun, because the South "was engaged in cultivating the great staples of the country for a foreign market, in a market where we can receive no protection, and where we cannot receive one cent more to indemnify us for the heavy duties we have to pay as consumers" (Clyde Wilson, ed., The Essential Calhoun, p. 190).
There is a second, more roundabout way in which import tariffs impose a disproportionate burden on exporters. As Wilson and Hogendorn further explain:
As tariffs cause imports to fall, less foreign exchange is needed to purchase them and the demand for foreign currency declines. The domestic currency will thus rise in value on the foreign exchange market. Exporters find that their foreign-currency earnings purchase less domestic currency and therefore they suffer.
Milton and Rose Friedman explain how tariffs discriminate against exporters and export-dependent regions on an even more fundamental level in their bestseller, Free to Choose (Avon paperback, 1980, p. 38):
If tariffs are imposed on, say, textiles, that will add to output and employment in the domestic textile industry. However, foreign producers who no longer can sell their textiles in the United States earn fewer dollars. They will have less to spend in the United States. Exports will go down to balance decreased imports. Employment will go up in the textile industry, down in the export industries. And the shift of employment to less productive uses will reduce total output.
This again is exactly how the export-dependent South viewed all the protectionist tariff bills promoted by the likes of Abraham Lincoln, a lifelong protectionist, and his Republican Party. Apply the Friedmans’ example to 1861, and one can easily see how higher tariffs on textile imports benefited the New England textile manufacturers and workers but harmed the export-dependent South. This is exactly how protectionist tariffs are always and everywhere a tool of political plunder. To make matters worse, as the Friedmans point out, they also cause an overall reduction in total output in an economy, making everyone poorer in an aggregate sense.
It wasn’t just the antebellum South that was victimized by Republican Party protectionism. By 1863, with the Southern Democrats out of Congress, the Republican Party increased the average tariff rate to nearly 50 percent. It remained at such lofty levels until the income tax was adopted in 1913. In a classic bait-and-switch con game, the federal government temporarily reduced the average tariff rate to gain support for the income tax, and then once the income tax was adopted tariff rates rose sharply once again.
During this time of Republican Party protectionist hegemony the farmers of the American West and the Midwest, who also depended quite heavily on foreign markets, were similarly plundered by tariffs. This led to a political movement for lower tariffs on the part of the "Populists." As explained by Frank Chodorov in his classic book, The Income Tax (pp. 36–37):
The plight of these farmers was made worse by the protective-tariff policy of the government. The best they could get for their products was the competitive world price, while the manufactures they bought, from the East, were loaded down with duties. Next to their demand for more money, the Populists clamored for lower tariffs."
http://www.lewrockwell.com/dilorenzo/dilorenzo58.html
Regards,
Rose
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