If you look at the events that created the north-south divide and ultimately led to the American Civil War, one of the prominent ones is the "Tariff of abominations", a name given to the bill passed by the U.S. Congress levying high taxes on goods imported from other countries.
Events Leading to the Tariff
In the early nineteenth century, New England saw a tremendous growth in industry. Lots of factories came up in this region. However, this growth faced stiff competition from the goods imported from other countries, particularly Britain. So, in order to protect the industry, which was still in its nascent stage, the US Government decided to take certain protectionist measures. On May 19, 1828, the then-president of the United States, John Quincy Adams, signed a bill putting very high taxes on goods imported from other countries. This bill was passed to ensure that American people bought more goods manufactured in America.
Although ostensibly protecting the industry, the bill was actually a ploy used by Andrew Jackson, a future presidential candidate, to ensure that president Adams did not get re-elected in the presidential elections of 1828.
This bill was greatly opposed by Southerners, and it was given the inauspicious name for two reasons. Firstly, now they could no longer get the goods at cheaper rates, as imports had become very costly. Secondly, due to this measure, British industry reduced its import of raw materials from the United States. Since the South depended on the sale of cotton to British industries for income, their financial condition started deteriorating.
It was not just Southerners who did not appreciate the passing of the bill. Certain New England industries, too, were opposed to it, as the bill included a clause wherein the taxes on raw materials increased considerably.
After the presidential elections, the Southern states hoped that the tariffs would be reduced by a great extent; however, this did not happen. It was then that vice president John C. Calhoun, who was from South Carolina, declared that since the tariff of 1828 was against the interests of Southerners and favored one sector of the economy over the other, it was unconstitutional, and hence should be declared null. When the US Congress failed to take any measures to rectify the law, in 1832, South Carolina officially declared this law null and void, and threatened to secede from the federal government. To crush this rebel, Andrew Jackson, by then president, proposed to use the army for collection of tariff. All these events raised the issue of the distribution of power once again.
The Final Compromise
It was in 1833 that the final compromise regarding the tariff was reached. Henry Clay of Kentucky proposed to Southerners that duties on some goods would be reduced, and that the tariff would be levied in accordance with the financial conditions of the region. This compromise was readily accepted, and the nullification ordinance was repealed.