South Carolina's insistence on nullifying the Tariff Act of 1832 led to the Compromise of 1833, in which Henry Clay and John C. Calhoun brokered a deal to lower tariffs over 10 years. South Carolina felt the Tariff Act of 1832 favored northern states that were more industrialized and therefore threatened to nullify the act of Congress.
Tariffs passed by Congress in 1828 and 1832 imposed duties on imports to America. Southern states objected to the tariffs and South Carolina even authorized an ordinance that declared the federal tariffs violated the Constitution and the spirit of states' rights. In December 1832, President Andrew Jackson issued a proclamation against South Carolina's action and threatened to use military force to ensure the tariff was enacted.
To defuse the situation, Clay and Calhoun authored a compromise law in which tariffs were slowly lowered over the next decade. According to the Smithsonian National Portrait Gallery, the compromise essentially prevented South Carolina from seceding from the Union.
The Compromise of 1833 was one of several instances in the first half of the 19th Century that dealt with states' rights versus federal rights. The most prominent of these fights were the Missouri Compromise of 1820 and the Compromise of 1850.