President Trump’s call to impose a 25 percent tariff on imported steel and 10 percent on aluminum is stirring a mindless debate between two discredited sets of opponents. As a result, it has become almost impossible for Americans to make any sense of the issue.
Tariffs are a blunt, primitive weapon that offer no real relief for U.S. industries and workers. The preoccupation with tariffs—generally set at minimal levels—is a diversionary tactic. In fact, U.S. workers are much less likely to be hurt by foreign competition than by the torrential offshoring of jobs. Nor will tariffs fix a global economy in which an astounding 82 percent of last year’s growth in global wealth went to the top 1 percent, according to a new Oxfam report.
As Robert McChesney and John Nichols insightfully summarized in People Get Ready, we are being told, “Don’t trust your own experience of shuttered factories and broken unions, let the experts who got us this far lead us deeper into the abyss.”
In one corner of this unproductive discussion over steel and aluminum tariffs is Donald Trump, who unleashed his plan in a particularly “unhinged” moment. But even if the self-described “very stable genius” was capable of rational consideration, he would have been blinded by his 19th-century view of tariffs and his obliviousness about the contemporary corporate-dominated world economy.
We live in a world economy dominated by transnational corporations without national loyalties, and which have far more weight than national governments. Contrary to Trump, nations are not “winners” or “losers” in global trade—transnational corporations are.
In an interview with The Progressive, William K. Tabb, professor emeritus of economics at Queens College, says the Trump’s plan would likely raise prices on a variety of goods while failing to render any serious help to steelworkers and others whom Trump claims to care about.
In the other corner, we have U.S. CEOs, leading Republicans like Paul Ryan, the Koch brothers, and mainstream economists decrying the violation of sacred “free trade” doctrine by tariffs. They are using the current tariff debate to steer public discussion away from the real fundamentals of corporate globalization.
Free traders are loathe to admit that 80 percent of global trade occurs within transnational corporations and their global supply chains. In other words, four-fifths of “trade” involves transactions like GE shipping parts and machinery back and forth with Mexico, or Apple obtaining iPhones from the notorious factories of its own supplier, Foxconn.
Nor are “free traders” eager to acknowledge that the offshoring of U.S. jobs has been key in driving down U.S. incomes and closing 56,190 factories—fifteen a day—between 2001 and 2012. During the 2000-2010 period, Commerce Department data show that major U.S. firms created 2.4 million jobs overseas while vaporizing 2.9 million in America.
And yet Trump’s new tax bill contains massive incentives for U.S. corporations to export more jobs to other countries.
Collectively, the free-trade advocates have shown a cruel indifference to how the large-scale offshoring of U.S. jobs has hollowed out America’s middle class. They turn a blind eye toward devastated industrial communities wracked by low wages, poverty, falling property values, high rates of domestic and street violence, and afflictions like opioid and alcohol abuse.
And even when the free trade establishment reluctantly admits that a problem exists, leaders of both parties airily prescribe “re-training” as a cure-all, despite the almost universal failure of these programs to restore decent living standards and healthy communities.
Moving toward meaningful solutions for America’s workers and communities will require rejecting both Trump’s reckless and unfocused tariffs and the chorus of conventional “free trade” elites.
Moving toward solutions will require rejecting both Trump’s reckless and unfocused tariffs and the chorus of conventional “free trade” elites.
Despite the superficial kerfuffle over tariffs, Trump and neoliberal promoters of “free trade” share a profound consensus, seeing “the world economy as a neoliberal dog-eat-dog jungle, where government’s role is to help the rich get richer,” as economist Jeff Faux describes it.
Instead of that elite vision where the world’s majority is chained to the global economic machine to maximize profit, we desperately need to build democratized economies designed first and foremost to meet human needs.
Roger Bybee, a frequent contributor to The Progressive, is a freelance labor journalist and labor-studies instructor base in Milwaukee, Wisconsin and previous editor of the Racine Labor weekly.