While trying to keep some consistency in my thinking--like, most people on the left I was anti-globalization in the 90s and 00s and I was also anti-making boards in Mexico/China--I'm trying to understand why I don't like the tariffs. I proudly wore my made in an American union shop Bernie T-shirt in 2015/16, but why am I so ferociously annoyed with these tariffs?
An obvious reason might be age. Now that I'm finally getting my footing in this stupid post 1980s economy, I don't want to deal with a dramatic change. It puts me at risk for job loss as the EU is an important customer for my company and they might respond harshly towards my employer in particular. After being poor for so long, I don't want to pay (a lot) more for absolutely everything. I've been saving to buy shit that would furnish a home and now that shit is out of reach again. And, we just went through a period of inflation, I'm not ready for another round. Being a millennial is exhausting.
On a continued personal note, I lived in rural America/Canada for 7 years. The hatred and vitriol of the locals was draining. Their inability to appreciate the financial sacrifices urban people make for them, inability to appreciate the knowledge generated in schools/university, and continual desire to touch the stove was annoying. And, the rural people were either retirees who aren't going to work a factory job or they were people my age who were doing drugs or had never attempted to come up. Life is hard out there, but those who I lived next to actively made it worse. My romanticization of workers was met with a harsh reality.
On a less personal note, I don't trust this will be good for workers because of Trump's and the GOP's past. Trump is anti-union, Trump is anti-any and all worker protections, Trump has a habit of fucking over his contractors, and I feel the right has rebelled against "global free-trade" in recent years, but still want to race to the bottom within the USA forcing low wages, job insecurity, and even child labor into the mix. It is hard to believe they want what is best for anyone but the ultra-wealthy. This would be a complete about-face for a party who championed fucking workers for my entire life. It is hard to believe that they would do anything other than continue to fuck us.
So what is Trump's case for the tariffs? Why is Trump so willing to put the stock market, jobs, and quality of life at risk for so many?
Why Trump won't give a shit about pain or turmoilStarting with the second question, which is easier to answer, I believe that he is embracing the idea that this will cause pain but it will be better because he likes Milei who is fighting inflation in Argentina. Milei's fight is increasing poverty of the people there and causing lots of pain, but inflation is coming down. It is no accident that Milei was on stage with Musk for the chainsaw show. Musk was inspired by and re-created Milei's chainsaw image. (Funny enough Milei is doing everything he can to get zero tariff trade with the USA.)
Why does Trump like tariffs?What Trump and friends say: 1) they are there to increase revenue to off-set his tax cuts for the wealthy. 2) they are there to increase production in America, which would eliminate the tax revenue generation in claim 1. 3) his supporters say it is just negotiations or a way to wield power over those he doesn't like, but also negates the tax revenue claim and the produce in America claim.
None of these make sense next to each other as they contradict one another, so let's pretend this is about increasing production in America.
How, so how can we make the case for Trump in terms of tariffs being good for AmericaPre-1930s America (where Trump is looking in terms of his stupid MAGA nonsense)
To the dismay of Democrats (the party of Southern agriculture who didn't want reciprocal tariffs on their goods), Republicans (the party of Northern industry) used tariffs to create space for the American industrial economy to grow. Tariffs at the time are higher than our peers and was one of the taxes we used to pay the bills instead of an income tax:
"The developing world, relied on 12 to 16 to 18 percent tariff walls, the United States’ tariffs ranged from 30 percent to 40 percent."
For developing countries tariffs--when done properly--can protect a domestic industry as it develops expertise, efficiency, and so on. This is called "import substitution" and its what Brazil, India, and other places did when trying to develop a few industries when trying to come up in the global economy.
In 1930, America's chemical industries, heavy manufacturing, and financial industries are ready to take on the world and we reduce tariffs.
Skipping forward to the 70sManufacturing jobs start to get hammered by technology, moving to right-to-work non-union states, and then off-shore. Obviously, this hollows out rural America in the north and midwest. Manufacturing moves to the sunbelt and overseas where wages and job protections are less. Today a Ford technician makes about 72K a year and a Honda technician makes 52K because Honda doesn't use union labor.
From the early 80s forward, we enter into the world of free trade + government austerity towards citizens. Reagan/Thatcher fucked workers as hard as they possibly could. Enter the age where unions and government are the problem not the solution. Clinton's "New Democrats" weren't much better. Remember, to the dismay of Democrats, Clinton worked with Gingrich to fuck over the welfare system, campaigned as pro-death penalty, and fired nearly 400K federal workers in his time in office.
In the 90s we fully leave our manufacturing economy and enter into a service/knowledge economy that is split between low wage WalMart jobs and high paying jobs like a lawyer to software engineer.
This is the dominant mantra until 2016 when 4chan conservatives really start to have a voice via Trump and his pack of idiots. The right starts to adopt the idea global free-trade is bad, but libertarian no holds barred anti-immigrant race to the bottom capitalism within nation-states will solve all of our problems and produce prosperity for all.
Trump 1.0. We tariff China.
Predictably this does nothing but fuck over those Americans selling to China and those of us who now have to foot the bill for Trump's subsidies to farmers, because manufacturers just switch to Vietnam and a whole host of other low wage countries. Tariffs need to be done on products to protect an industry not countries.
The tariffs
might have protected some steel jobs, but we lose manufacturing jobs in the industries that rely on steel to produce goods. And, I'm not even sure it protected any steel jobs. The CPA a lobbying firm Trump is leaning on to justify his tariffs show that among 4 big steel firms, job actually declined post-tariffs : 86K to 83K jobs in steel. "The tariffs are actually helping [businesses] make the transition to newer, cleaner, lower-cost technology. This is bad news for workers at the older facilities [but good for industry]"
Trump 2.0. We tariff everyone on everything.
Well at least we learned that tariffing just China wasn't going to work. It is still clumsy, but there is some growth in thought here.
image stolen from Jacobian
We still have a few problems though:
Just like last time, not all things being imported are consumer goods. The majority of shit from Mexico isn't a final consumer good. Instead, they are inputs for products that will be turned into consumer goods. This fucks over the companies relying on those inputs. And, unless Americans start aligning their diets with the seasons, where else are we going to get avocados in February?
Also, financial capital can still flow across the world. Any good investor wants to make money, they don't give a fuck how they make money. Nothing says investing in a factory to produce t-shirts in America is where the best investment returns will come from. It still might be smarter for someone to invest in a Thai factory to produce shit to sell to the EU, Africa, and Asia.
How will this turn out?In terms of number of jobs:
I have little faith this will increase job opportunities. I expect the opposite. The tariffs in Trump 1.0 didn't seem to increase the number of jobs. Inflation of input cost will cause some companies to go out of business and new technology will reduce need for more workers and result in layoffs for those who hung on with outdated machinery.
In terms of salaries:
I'm not sure this will result in amazing salaries. There will be a few heavy machining jobs that pay awesome wages, but I don't expect Hanes to start paying American Apparel wages to workers. Even if we got a lot of manufacturing back, a lot of it is going to pay shit wages. I don't imagine working at the Tyson chicken slaughter house becomes a good job without another
Jungle and a left leaning administration that wants to protect workers. And, we won't have the talent needed for a lot of these jobs.
What is missingFor the tariffs to actually help workers, firms need to re-invest instead of business as usual shareholder value, stock buy backs, and so on. We need to require firms to do this, but instead, we are going to engage in typical fascist capitalism, government intervenes in the market, but let's the capitalists retain their profits.
We need job training for workers. We need protections for workers. We need environmental protections for our water and air. I don't want factories coming back just to make a bunch of cancer allies.
So, why am I against these, but would probably support Bernie doing something similar?If Bernie would do something similar, I think it would be completely different. It would come with things that immediately help workers and don't immediately fuck consumers. I think Bernie would attempt to reduce any sort of transitional pain. Not tell everyone, "eat a dick" and then go golfing spending millions of tax payer money on his own properties.
And, I think Bernie would do it with honesty, which the Trump admin is not doing.
I don't think he'd do blanket tariffs on all products. I think he'd work to figure out, which high value products should be produced here and which low value products can be produced elsewhere.
So, I am and the rest of the left a bunch of hypocrites? Am I the liberal Phil Ochs sang about?To some degree, sure. But, like those on the right, our interpretation changes based not just the goal, but how its done, the motivation to get it done, and the history/context surrounding the actor that all affect perception.
Pretending the goal here is to get Americans jobs that pay decent wages, this is something the right has resisted (and would likely still resist) today if done in a different fashion. There is a willingness to crash the economy, pay higher prices, and induce suffering for blue collar jobs, but when it comes to supporting low level service workers, the right complained everything would cost too much if everyone got a living wage. They complained that it would ruin the economy and things would cost too much. The assumed sacrifice is probably less than the one we are facing now, but they are willing to make us all suffer so rural people can have living wages in fantasy factories. And maybe the fact that city people and educated people will suffer is part of the appeal.
I feel this is a lot like this is like Brexit and Grexit. Brexit had the support of the right and Grexit had the support of the left. The same exit, but with different motivations and likely different ways of completing the same action.
Topic: Changes under Trump 2.0 (Read 188618 times)