From the early days of the United States, there was support to place tariffs (taxes on imported goods) to help new American industries compete effectively. After the War of 1812, the British were able to flood the American markets with cheaper goods, which led to increased support for higher tariffs. Leading the charge to increase tariffs was Henry Clay of Kentucky. Clay believed in an American system of trade, where American manufacturers were protected and allowed to grow, while the income from the tariffs would be used for internal improvements. Clay also wanted to ensure that the U.S. would not be dependent on the British. The rising quantity of manufacturing in the North converted some New Englanders, including Daniel Webster, who had supported free trade, to become supporters of higher tariffs.

In 1816, in the aftermath of the war, Congress passed a tariff act that levied a 25% tariff on many imported goods. While this represented an increase, it was not considered very high for the times. The Panic of 1819, largely caused by the worldwide drop in commodity prices, encouraged many in Congress to try to insulate the U.S. from the vagaries of the worldwide markets. In 1820, a more protective measure passed the House but failed to pass the Senate due to Southern opposition. The South, however, was fighting a losing battle. The North continued to develop industry rapidly, while the South relied more and more on growing and selling cotton. The population of the North continued to expand. More importantly, in the battle over tariffs, the western states that were being added to the Union tended to favor stronger tariffs. Finally, in 1824, with Henry Clay in the powerful position of Speaker of the House, tariffs were raised to 35% on imported iron, wool, and hemp. Many supporters of tariffs thought that 35% was not high enough. There were many tariff supporters who wanted to raise the tariffs even higher.

Supporters of the soon-to-be President Jackson devised a plan to increase tariffs in a way that would help the Mid-Atlantic states, states crucial to Jackson's election hopes. They did this despite the clear opposition of Southern states, led by Senator Calhoun. The supporters of a tariff increase were victorious, and some tariffs were raised to as much as 50%.