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 within 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).
Though the members of the TF viewed the claims of rebuilding damage as an excuse to force through a Protectionist tariff which would protect the interests of Eastern industrialists at the expense of Western trade and industry. The vast majority of TF senators believed in helping to rebuild the damage from the NER crisis, but believed in calling for patriotic donations, rather than introducing a tariff, which they believed to be a dangerous precedent.
I think I speak on behalf of my fellow colleagues of the Traditionalist Faction when I make it clear that we would have no issue with paying our just part in the reconstruction of the Union, repairing the damages and carnage wrought by the treasonous Anarchists. Our concern is with the manner of which the funds are raised. We feel that this Senate should call on all Union nations to give whatever amount they consider reasonable in part of their patriotic and humanitarian duties to assist their fellow man, a tariff to extract currency that could otherwise be provided by patriotic charity is the incorrect manner of raising emergency relief, and we feel that it will set a dangerous precedent - what if this Senate decided to fabricate an emergency to raise even more taxations and tariffs? The capability for misuse of this power is much too tempting for our liking.
—A Senator of the TF, during the tariff debate in the Union Senate
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 imported 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 her 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 was the only way to save the Union.
Following this rejected of their compromise, and the mobilisation of Federalist forces, the Zarkan Kingdom mobilized her miltiias, 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 75% in exchange for continued TF membership of the Union.
President Kinley, having already personally witnessed the devastation caused by the destructive New Earth Republic crisis, did 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 mobilized 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 her war footing and ordered her military forces to stand down, the crisis came to an end.
Aftermath[]
When I was twenty-four 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 our 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 crisis led to a surge in Ultranationalism amongst the Western nations, partly out of a sense of betrayal by the Union and feelings of rage towards it. In the months and years following the crisis a number of nationalist parties were founded across the West, such as the "Nationalist Phalanxes of the Zarkanian Motherland", the "Zarkanian National League", the "Party for the Freedom of the Zarkan Kingdom" and the "Westian National People's Party". Western Nationalism saw a huge boost thanks to the crisis, with an increasing number of nationalist parties across the West forming alliances with each other and making plans to create an independent Western Nation.
The Tariff Crisis was the first in a long chain of events which led the reformation of the Traditionalist Faction into the Western States Confederation in 23 BBY, which would, in turn, lead to 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 Act in 25 BBY, which was again rejected by the Traditionalists, forcing the Union to renege it.
Several months after the crisis had ended a number of Western sympathizers in the Federalist-dominated East came together to form the "Friends of the Western Aeropican Nations" (Abbrev. FotWAN/FWAN), a group sympathetic to Western Nationalism and the plight of the Western nations. The group lobbied the Union to respect the rights of the West, and to treat them fairly in their endeavors. By the time when Richard Williams came to power in 24 BBY the group had effectively turned into a Fifth Column of the West, viewing the Union as completely corrupt, and unworthy of ruling.