Why did congress’s inability to tax goods hurt American merchants?

Congress had borrowed money from the American citizens and foreign countries to pay for the war. They still had to pay soldiers for their service as well. Without having power to tax, the Confederation couldn't pay its debts. ... Morris proposed a 5% tax on imported goods to help pay national debt.

no because we were not ready for war

when world war i broke out across europe in 1914, president woodrow wilson proclaimed the united states would remain neutral, and many americans supported this policy of nonintervention. however, public opinion about neutrality started to change after the sinking of the british ocean liner lusitania by a german u-boat in 1915; almost 2,000 people perished, including 128 americans. along with news of the zimmerman telegram threatening an alliance between germany and mexico, wilson asked congress for a declaration of war against germany. the u.s. officially entered the conflict on april 6, 1917.