To Tariff, or Not to Tariff- that is the Question
Last week, President Donald Trump announced his intention to place specific tariffs on imported aluminum and steel, as a means to preserve aluminum and steel manufacturing in the United States. Almost immediately, globalist Republicans and economists, alike, began to howl at the notion of placing such tariffs- warning that doing so would lead to trade wars and would ultimately hurt American consumers of products utilizing these materials. Interestingly many Democrats, who traditionally embrace this kind of protectionism because it favors industries dominated by labor unions, have joined in the criticism of Trump’s plan to levy a 25% tariff on imported steel, and a 10% tariff on imported aluminum. Had such a proposal been brought forth by a Democrat president, Democrats would have rejoiced at such a prospect of protectionist policy, which only goes to show that they are going to oppose Trump, at any and all levels, for the mere sake of opposing the president who they despise to their very core.
Meanwhile, in the face of such criticism, President Trump maintains that the imposition of such tariffs is the only means left to prevent the entire shutdown of aluminum and steel manufacturing, here in the United States. Because these two commodities are so vitally important to the manufacture of armaments, the president has couched this policy in terms of ensuring our national defense, especially in times of war. Admittedly, it is impossible to manufacture weapons of war without ready access to these materials, and any scenario which would see the United States solely dependent on the importation of these materials, in times of war, is a prospect no responsible president would dare embrace. Hence, the need to preserve the last remnants of aluminum- and steel-making capacities before they, too, altogether disappear from our domestic manufacturing mix.
Critics cite the failure of a tariff once placed on imported steel, imposed temporarily by the George W. Bush administration in 2002. These temporary tariffs were intentionally set to expire in 2005, but were rescinded well before that date, largely because the Bush administration caved in to protests from the World Trade Organization (WTO). The 2002 tariffs exempted Canada and Mexico, because their inclusion in the imposition of these tariffs would have meant the placement of fines against the United States, under the Clinton-signed North American Free Trade Agreement (NAFTA). This is the same NAFTA which Donald Trump has long opposed, since its inception in 1994. Trump’s opposition to NAFTA, along with the prospects of placing tariffs on imported aluminum and steel, were key components of his 2016 presidential campaign, alone amongst sixteen other Republicans vying for that year’s Republican nomination.
Once again, the issue comes down to the difference between globalists like both Bushes, both Clintons and Obama, who have steeped and vested interests in the maintenance of a global economy pursuant to a “new world order,” and nationalists like Donald Trump, who favor putting American interests ahead of those interests favored by the WTO. Such internationalists have, during the last seventy years or so, made “tariff” something short of a dirty word- that is to say when the “tariff” to which they refer, is one imposed by the United States. Since the end of World War II, the United States has generously allowed foreign countries to impose tariffs against the United States as a means of rebuilding their respective post-war economies, even when the imposition of such tariffs have wrecked many U.S. industries and cost hundreds of thousands of American manufacturing jobs in the decades since.
Bethlehem Steel, and the history of steel manufacturing in Sparrows Point, Maryland, just east of Baltimore, is a primary example of what has happened to the steel industry in the advent of internationalist policy. Once Maryland’s largest employer, there was a time when steel manufacturing at Sparrows Point employed some 65,000, including my uncle who would sacrifice his lungs to the production of steel, as his job involved lining the great ovens with asbestos brick at that plant. By the time I was selling personal protective equipment to the plant in the mid-1980s, the employment at that facility was down to about 6,700, and it was all dependent upon the successful implementation of a new technology, developed here in the United States, of continuous casting in the manufacture of steel. That effort proved to be too little, too late, and by the second decade of the twenty-first century, steel manufacturing at Sparrows Point ceased to exist. The gargantuan plant, which had once been the world’s largest manufacturer of steel, became a hollow monument to what was once the power and might of the American workforce.
The seeds of this economic globalism go all the way back to the presidency of Woodrow Wilson who, interestingly enough, began the process of shifting federal tax revenue away from tariffs and duties on foreign imports, and onto personal income. It was Woodrow Wilson who in 1913 imposed the first permanent federal income tax onto the American people, via the Sixteenth Amendment to the United States Constitution, and it was Wilson who initiated the first payroll tax at the beginning of his presidency. That same year incidentally saw the creation of the Federal Reserve System, which has overseen monetary policy ever since. It was Franklin D. Roosevelt who later imposed the Social Security Income tax in 1936, and it was Lyndon B. Johnson who first imposed the Medicare payroll tax in 1965. Essentially, three of the most powerful Democrat presidents ever elected are largely responsible for all of the federal taxes withheld from American paychecks, and it is these policies which have largely shifted funding for the Unites States government away from tariffs, and onto the backs of American wage earners.
All of these years later, it was the presidency of Donald Trump who pushed through the largest income tax reduction on individuals and businesses, in the Tax Reform and Jobs Act of 2017, and now it is this same administration who seeks to unravel seventy years of unfair trade policies, in a twilight attempt to recover American economic pre-eminence, after seventy years of propping up other world economies. The United States, alone among world powers, has both rebuilt post war economies in nations with whom we were once at war, and has maintained and provisioned the defense of European and Asian allies since the end of World War II, now seeks to level the playing field when it comes to international trade. While resistance to Trump’s tariffs from other nations is quite predictable, in spite of the largesse Americans have availed to the world, resistance to tariffs on steel and aluminum, from our own politicians in both parties, speaks to the extent that globalism has largely superseded Americanism in economic policy.
Any nation which comes to depend upon other nations for the strength of its national economy, and the ability to arm and defend itself in times of war, is a nation whose continued safety and security has become the property and purview of foreign interests, and not their own. The same holds true for American interests…something that Donald Trump has understood for decades, but something found repugnant to those who place the world’s interests above our own.
-Drew Nickell, 5 March 2018
© 2018 by Drew Nickell, all rights reserved.
author of “Bending Your Ear- a Collection of Essays on the Issues of Our Times”
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