How did the tariff policy change Otto von Bismarck’s relationship with the National Liberals?

The introduction of a new protective tariff in 1879 served as a major catalyst for the breakdown of the alliance between Otto von Bismarck and the National Liberal Party.12

The relationship deteriorated due to several key factors:

• Financial Control: The National Liberals sought to increase the power of the Reichstag by establishing direct imperial taxation. Conversely, Bismarck was determined to implement indirect taxes to secure independent revenue and escape parliamentary interference.2
• Economic Policy Shift: Following the economic crisis of 1873, Bismarck moved toward a regulated, protectionist economy to support German agriculture and industry. This shift directly contradicted the liberal economic principles previously supported by the National Liberals.23
• Political Realignment: Bismarck used the tariff issue to forge a new political alliance with the Centre Party and conservative factions. This move was intended to isolate the National Liberals and prevent further political democratization.23

Ultimately, the party split in 1880 over these disagreements, marking the end of their role as a virtual government party and signaling Bismarck's turn away from liberal cooperation.12