Trump's Tariffs Are Not Really the Point

Stan Sorscher

Stan Sorscher Labor Representative, Society for Professional Engineering Employees in Aerospace

SEATTLE (PAI)--We pay too much attention to GOP President Donald Trump’s tariffs. We’ve missed the point of what China is doing, and what we want.

When he was president, and before, Ronald Reagan told us that markets are good, government is bad, and we should let free markets solve all our problems. Winners will prosper, and gains will trickle down to workers and communities.

At the global level, this meant free trade policy that blurs national boundaries, and merges or integrates our economy into the global economy. This approach shifts power in favor of global corporations, while reducing policy space for governments, workers, communities, and the environment.

China isn’t “cheating” on trade. They are playing a different game: advancing the interests of their nation, rather than global corporations. America’s new trade policies should advance the interests of our people. 

China has never accepted our free-trade free-market model. Zhang Xiangchen, China’s ambassador to the World Trade Organization, made this clear a few days ago.

“China has been vigorously exploring a road of market economy, which suits China’s own national situation and circumstances, and we have made remarkable progress in this endeavor. Whatever others may say, we will march along this road unswervingly…As for those who speculated that China would change and move onto a different path upon its WTO accession…that was their wishful thinking.”

(What the ambassador tactfully omitted: Much of that “wishful thinking” came from U.S. corporations and politicians – who pushed the WTO through over worker opposition.)

China has their form of mixed economy – partly market-oriented with significant national industrial policies. Their strategic plan is vast, comprehensive, and compelling. China’s One Belt One Road strategy is part of a huge infrastructure program to extend influence and move their products to Africa, Europe, the rest of Asia, and South America. Their industrial strategies are designed to dominate ten industries of the future.

China’s leaders understand that free trade blurs national boundaries and national identities. That is the exact opposite of China’s unswerving march to becoming a dominant economic and political power.

From our free-market perspective, China is cheating. It’s more realistic to say they are playing a different game with different rules. Trump tariffs are meant to get China to “play fair” – to follow our rules.

 Zhang Xiangchen is telling us, “That dog won’t hunt.” China will not abandon their highly successful vision, become model capitalists, and fall into line with the neoliberal free-trade principles at the core of NAFTA and the WTO model for globalization. (“Liberal” in this sense means free or liberated from regulation.)

Ironically, Trump himself broke the spell of free-trade orthodoxy. That is a political fact. Trump’s success with disenchanted voters can be traced directly to the fact that the neoliberal free-trade model is exhausted, socially, politically, and economically. Robert Kuttner makes the definitive statement to that effect, in his new book.

Trump is using tariffs to achieve his goal of balanced trade. OK. Exports should equal imports, more or less. A country that runs large chronic trade deficits – us, for instance – will have serious problems.

However, balanced trade is not a strategy.

Since the mid-1970’s, our neoliberal policies have de-industrialized our economy, and underinvested in infrastructure. Student debt is over a trillion dollars and rising. Resentment over wage stagnation is destabilizing of our political system. These are all market failures.

Correcting market failures demands some form of mixed economy with strong public policies that express our values as a country. Most of us want public policies that create stronger communities, opportunity and fairness, invest in the future, and raise living standards.

That requires investments in infrastructure, education, and research and development. We need answers to inequality and climate change. We need good jobs and economic security.

China’s industrial policies reflect their values. Japan, South Korea, Singapore, Germany, Canada, and Scandinavia all have some form of mixed economy with industrial policies that recognize their national interests and reflect their values. In our own history, we developed national strategies that industrialized our economy in the 19th century and made America pretty good, if not great, in the 20th century.

In China, the purpose of their economy is to acquire the means of production, consistent with their Marxist tradition. In our failed neoliberal model, the purpose of an economy is to make business succeed, particularly global companies that produce offshore.

In a more balanced approach, the purpose of an economy would be to improve the quality of life and raise living standards:

            * No country in the world is pure free trade or pure protectionist.

            * Every country in the world has an industrial strategy – ours is particularly bad.

            * We need effective industrial strategies of our own.

            * Our new trade policy will follow directly from an industrial strategy.

Trump’s negotiators are updating NAFTA. The new agreement may include stronger labor rights in Mexico, more U.S. content in autos and government procurement, and higher wages for some Mexican workers. It may reverse the corporate-centric power distortions in NAFTA’s dispute settlement system.

These improvements are sometimes called “harm reduction.” This is good, but not inspiring, since it accepts the underlying harm, just less of it.

If we see improvements in NAFTA that reduce harm, we should regard those improvements as turning points. Each positive step builds momentum for fundamentally rethinking the way we manage globalization to favor workers and communities. In that case, all three NAFTA countries would want a sunset or review provision in NAFTA so we can each adjust our economic and trade policies as strategic goals develop.

Trump leads the rancorous Republican rethinking of how we manage globalization. Democrats may or may not be able to articulate an alternative. But the sooner we start this national conversation, the better.

Stan Sorscher is on staff at the Society of Professional Engineering Employees in Aerospace (SPEEA), a union representing over 20,000 scientists, engineers, pilots, technical and professional employees in the aerospace industry. He is President of the Washington Fair Trade Coalition, and represents organized labor on the Board of the Puget Sound Regional Council Economic Development District. He was appointed by the Governor to the Board of the Export Finance Assistance Center of Washington. After receiving his PhD in physics from UC Berkeley, he worked for two decades at Boeing, building optical, ultrasonic, and X-ray systems to visualize materials and assemblies. Follow Stan Sorscher on Twitter: www.twitter.com/sorscher

 

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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