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

Union Matters

America’s Wealthy: Ever Eager to Pay Their Taxes!

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Why do many of the wealthiest people in America oppose a “wealth tax,” an annual levy on grand fortune? Could their distaste reflect a simple reluctance to pay their fair tax share? Oh no, JPMorganChase CEO Jamie Dimon recently told the Business Roundtable: “I know a lot of wealthy people who would be happy to pay more in taxes; they just think it’ll be wasted and be given to interest groups and stuff like that.” Could Dimon have in mind the interest group he knows best, Wall Street? In the 2008 financial crisis, federal bailouts kept the banking industry from imploding. JPMorgan alone, notes the ProPublica Bailout Tracker, collected $25 billion worth of federal largesse, an act of generosity that’s helped Dimon lock down a $1.5-billion personal fortune. Under the Elizabeth Warren wealth tax plan, Dimon would pay an annual 3 percent tax on that much net worth. Fortunes between $1 billion and $2.5 billion would face a 5 percent annual tax under the Bernie Sanders plan.

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No Such Thing as Good Greed

No Such Thing as Good Greed