Are We in a Trade War?

Celeste Drake

Celeste Drake Trade and Globalization Policy Specialist, AFL-CIO

TV pundits keep repeating that we’re in a “trade war.” What does that even mean?

Now, let’s tone down the rhetoric just a bit. Real wars, such as those in Iraq and Afghanistan, are deadly, dangerous, scary affairs. No one should confuse tariffs with real wars.

In terms of economics, the closest thing we have to a “war” is the relentless attack on workers that has been taking place for several decades as economic elites (including corporate CEOsbad actor employers and the 1% who don’t want to pay their fair share of taxes) have worked to rig global economic rules to benefit themselves at the expense of ordinary working people.  

The attack on workers has been waged on many fronts, from so-called “right to work” laws that deny our freedom, to regressive tax laws such as the recent Republican tax bill giving big tax breaks to companies that outsource jobs, to attacks on overtime pay and workplace safety, to defunding schools and meals for our children. The attack on workers also comes in the area of trade policy, and includes unfair, predatory actions by China. Trade attacks on workers are aided and abetted by greedy corporations that outsource jobs and abuse workers, and by U.S. officials of both political parties who have failed to stand up for us.

So why are so many people saying we’re in a trade war? First, to scare us. Maintaining the status quo is exactly what the powerful want to keep workers and wages down. Second, because the U.S. is finally starting to do something about harmful trade practices that hurt working people. It has been so long since the U.S. has ambitiously used trade remedies to defend our economy that Wall Street fat cats are calling it a trade war.

While tariffs are not dangerous per se (in fact, they can be a very effective tool to address harmful trade practices and create jobs), they must be applied carefully, thoughtfully and strategically. If done right, tariffs can persuade trading partners to change their harmful practices. In that case, the tariffs will disappear quickly. On the other hand, if the tariffs are applied haphazardly, they may backfire, causing more economic disruption than necessary. As with anything it does, the government should be smart in how it applies tariffs. And it should have a plan that minimizes negative side effects for the U.S. economy and prioritizes benefits for working families—no matter in what industry those families work.

Posted In: Allied Approaches, From AFL-CIO

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