Trump is “Tariff Man,” right? He appears to love them. Therefore, one would think, tariffs are wrongheaded.

But then, what about Biden keeping and extending Trump’s tariffs? And why do several of our national unions support the judicious use of tariffs as part of a pro-worker economic policy?

Let’s start at the beginning. A tariff is a tax collected by the government on imports from other countries. The tax is collected from the importer. But who really pays it?

Controversy and simplistic claims start here. Does the exporter (from China, say) lower its prices and absorb a loss in profits in order to remain competitive? That is Trump’s assertion

– since China is supposedly devastating our economy, along with immigrants and liberal elites, he is planning to punish China with even higher tariffs than the ones he and Biden have already implemented.

Another possibility, the position usually taken by mainstream economists, is that, like any tax, the tariff is just passed on by, say, Walmart or whoever the importing corporation is, in the form of higher prices. That would mean consumers pay, not “China.” (We have to be careful here, since some imports are produced overseas by US corporations taking advantage of low wages, not by Chinese firms.)

So, it’s complicated. Trump putting an across-the-board tariff on Mexico would likely raise grocery prices, since we import much of our fresh produce from Mexico, and production within the US or elsewhere could not immediately ramp up to replace Mexican avocados, for example.

Much like the Washington State sales tax, those price hikes would disproportionally hurt lower-income families, who spend a much bigger percentage of their income on food.

A Brief History of Tariffs

Targeted tariffs are a different story. The early independent United States raised tariffs against British textiles and manufacturing in order to develop its own industry. A country doesn’t become prosperous for very long by just exporting raw materials and not diversifying into manufacturing.

In the post-WWII period, developing countries such as South Korea, Taiwan, and then China used tariffs as part of their industrialization strategy. But US corporations, and neoliberal policymakers, used US financial and military power to “negotiate” low tariffs and free trade to give US capital access to markets and the ability to ship jobs to low-wage countries.

But now that China produces 35 percent of the world’s manufactured goods, and the US share is down close to 10 percent, things have changed.

Neoliberalism has been shown to benefit US corporations and elites and devastate working families. Now the US needs an industrial policy. Carefully targeted tariffs have to be part of that.

To be clear, tariffs are only one tool. Industrial policies should include tax incentives and subsidies for research and innovation. The Inflation Reduction and Chips Acts, and infrastructure spending, all under Biden, have done some of that.

But we have to do more – you cannot just shovel money and protection to US corporations. They will just raise prices and buy back stock and raise CEO pay and dividends to wealthy stockholders. There have to be targets for investment; goals for carbon reduction; requirements for unionization, wages, and job training; and worker participation in decision making. Yes, the list is long – the time of corporate plundering has been long.

Back To Tariff Man

None of that is what Trump has in mind, of course. He thinks he can restore US domination through intimidation. Or bluff and threaten and use tariffs as a symbolic “I’m on your side” to divert attention from tax and regulatory cuts.

So he is threatening Mexico (and Canada?) with tariffs unless they do something about immigration and fentanyl exports. He threatens Brazil and others for moving away from using the US dollar in foreign transactions.

Trump is telling other countries to play ball or get whacked. He is using US workers to support an America First agenda. But he has no intention of supporting unions or limiting the freedom of capital to do what it wants.

We need fair trade, not free trade. Smart tariffs would penalize imports of nickel from toxic Indonesian mines, imported BMW’s from the factory that pays Mexican workers $1.50 an hour,

and any import that contributes significantly to climate change.

Tariffs are a tool that can be used judiciously, as part of an overall strategy to support working-class jobs and wages and training and innovation. But we do not want to buy into America First. We want trade policy that benefits all workers.