Trade Enforcement is not a Trade War
Saying trade enforcement is not a trade war, AFL-CIO trade specialist Celeste Drake strongly defended new U.S. tariffs the Trump administration imposed against dumped steel imports worldwide.
“The tariffs to protect U.S. national and economic security are overdue,” Drake said in a written forum sponsored by The Dialogue, a Canadian website. Other writers were corporate.
“They are a good step toward strengthening firms and protecting workers in the steel and aluminum industries, providing they are targeted to the countries that caused the problem, such as China.”
“It is important to distinguish between trade enforcement and a trade war. Wall Street’s ‘chicken little’ rhetoric comparing this action to the Smoot-Hawley tariff” of 1930, which mainstream economists blame for accelerating the Great Depression “has no basis in fact.”
“More important, however, is that the global trading system needs comprehensive changes to prevent the kind of game-playing we have seen in global steel markets.”
Led by the Steelworkers, unions have campaigned for fair trade, not “free trade,” for years. And USW has taken the lead in filing unfair trade complaints with the federal government. Until recently, the government only reacted to those petitions, but the Trump administration’s Commerce Department is now initiating investigations.
Last year, Trump ordered the Commerce Department to determine of unfairly traded steel and aluminum reduced American capacity to the point of threatening national security. Commerce Secretary Wilbur Ross determined it did and recommended tariffs or quotas or both. Trump then imposed 25 percent worldwide steel tariffs and 10 percent aluminum tariffs without violating world trade rules, under a section of U.S. trade law.
Trump gave nations a chance to contest the tariffs, then excempted numerous countries, including ally Canada and NAFTA partner Mexico. Steelworkers International President Leo Gerard hailed the tariffs.
The Chinese are the big overproducers, as well as the world’s largest steel producer. Their overcapacity is so large it drives down prices worldwide and drives domestic steel plants out of business and workers out of jobs.
For years, firms and workers in both the developed and developing world have supported action against unfair trade practices. In this century, China, in particular, has engaged in currency manipulation, denial of labor rights and overproduction — trade issues the World Trade Organization and other multilateral forums failed to address,” Drake wrote.
And she said the United States, Canada and Mexico should use talks on renegotiating the 24-year-old job-killing North American Free Trade Agreement for “a coordinated response to dumping, overcapacity, tax avoidance and currency misalignment, even as they work on improving existing NAFTA labor and investment regimes.”
“Now is the time for the countries of the Americas to come together to address beggar-thy-neighbor trade strategies, abandon the race to the bottom, and build economies that work for ordinary families, not just the global investor class.”
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