Tariff Crisis

"We wholeheartedly reject the illegal, unethical and unconstitutional Tariff of Monstrosities. We fail to see how it is fair for us to be forced to pay a tariff on all goods from our fellow Traditional Faction members, to fatten the Eastern industrialists' and the Senate's wallets at the expense of the West! We, therefore, tender our Ordnance of Nullification, the Tariff of Monstrosities is henceforth null and void with our national borders, no "Tariff of 44" shall be collected within the national boundaries of the Kingdom and Empire of Zarkania."

- King Daniel IV in a message to the Union Senate

The Tariff Crisis was a political crisis which took place in the Union of Earth States in the 44th Year of Union (37 BBY) in which the nations of the Traditionalist Faction (TF), the original 59 members of the Union, rejected a tariff which had been placed on their goods by the Union in order to raise funds for the Union government to help with things such as expenses for rebuilding nations following the recent end of the New Earth Republic crisis (40 BBY-38 BBY).

The members of the Federalist Faction (FF), the centralist faction which opposed the Traditionalists, made a motion to introduce a tariff on all goods being importing and exported between Traditionalist nations to force the Traditionalists to buy goods at inflated prices from Federalist territories, this was done to both increase the profits of the industrialists within the Federalist nations, but also to raise tax money for the government.

This tariff was known as the "Tariff of 44", or, more commonly, as the "Tariff of Monstrosities" within the Traditionalist nations. The Traditional Faction representatives within the Union Senate hotly contested the tariff, though the tariff managed to pass with support from the Union Council.

Despite having lost the vote due to intervention from the Union Council, the Traditionalist Faction nations remained steadfast in their rejected of the tariff, the Parliament of the Zarkan Kingdom and Empire convened to discuss the matter, in the end there was a vote on whether to accept the tariff, the overwhelming majority of votes went to the rejection side.

The Parliament then passed an Ordnance of Nullification, which stated that the tariff was null and void, and the Zarkan Kingdom would not collect the tariff with their national borders, the Parliament assembled the Committee of Compromise, to negotiate a lowering of the tariff with President Anderson Kinley, the Union President.

The Committee managed to negotiate a deal with President Kinley in which the Union would dispose of the tariff entirely in exchange for continued TF loyalty to the Union, President Kinley was willing to accept the deal, though the hardline Federalists rejected it, declaring their intention to invade the Zarkan Kingdom to collect the tariff by force, persuading President Kinley that military intervention is the only way to save the Union.

Following this rejected of their compromise, and the mobilisation of Federalist forces, the Zarkan Kingdom mobilised the Royal Zarkanian Militia, Daniel Zarkan IV met with the other TF leaders in order to discuss the possibility of the secession of the entire TF into their own proposed military alliance and trading bloc, the "League of Independent Nations".

Two days later the Federalist forces were on their way to the Zarkan Kingdom, and the Zarkan Kingdom was prepared for war, and to secede, however within hours of conflict the Committee of Compromise tried one last time to avoid war, they negotiated a deal with President Kinley to reduce the tariff by 50% in exchange for continued TF members of the Union.

President Kinley, having already served through the destructive New Earth Republic crisis, and not wanted to see another destructive war, accepted the deal, despite protests by the Federalists, who urged him to reject the proposal.

President Kinley issued an executive order to overrule the Federalist decision to invade the Zarkan Kingdom and bring the mobilised Union forces back, this was unpopular with the Federalists, but they were not able to prevent it. With the Union forces withdrawn, the Zarkan Kingdom relaxed their war footing and ordered their military forces to stand down, the crisis came to an end.

Aftermath
"When I was ten my nation was prepared to withdraw from the Union, and to be invaded by them, we protested their unlawful and unfair tariff, we challenged it with little fear because we knew were doing the right and just thing, we were not about to let ourselves be bullied and robbed by the greedy! That set in motion a long chain of events which eventually led to the birth of Confederacy, sixteen years later"

- Jane Zarkan on the Tariff Crisis, 21 BBY

Whilst the Tariff Crisis was peacefully resolved, there were many who were worried by how close the Federalists and Traditionalists had come to war with each other. Public opinion turned hostile against the Federalists, since it was the Federalists who had proposed the tariff, and hardline Federalists who had almost torn the Union in half by war.

In order to maintain peace President Kinley, himself a Federalist, albeit a more moderate one, was forced by public outcry to reprimand the hardline Federalists for their militarist actions, the hardline Federalist nations were forced to pay hefty fines to the Union government, this resulted in the Federalist Faction losing faith in President Kinley, and regretting their championing of him, believing him to have "made a traitor of himself, and effectively joined the Traditionalist Faction", as one Federalist put it.

Despite the Federalists' lack of support for Kinley the Traditionalists found respect for him in his fair and unbiased handling of the crisis, and thus kept him in power until 28 BBY, when he was replaced with Kieran Lamb, in 33 BBY Kinley officially changed his allegiance to the Traditionalist Faction, having been swayed by their support of him and the arguments they put forward for Conservatism, this was confirmation to Federalists that Kinley was indeed a traitor to their part.

The Tariff Crisis was the first in a long chain of events which led the secession of the Traditionalist Faction nations and the birth of the Confederate States of Earth in 21 BBY, on very rare occasions the Confederate States was referred to as the "Second League of Independent Nations", in reference to Daniel Zarkan IV's proposal for an allied trade bloc of Traditionalist Faction members.

The Union would again try to tax the Traditionalist Faction nations with the passing of the Zarkan Tax in 25 BBY, which was again rejected by the Traditionalists, forcing the Union to renege it.