“It’s much easier…for a politician to hold a news conference in front of a shuttered factory, talk about feeling their pain, maybe bite their lip and let their voice quiver, and then promise to take concrete actions to save American workers.”
Donald Trump made news last week by proposing a tariff on steel and aluminum imports. This resulted in protests from many Republicans and inspired cheers from many Trump supporters. Both sides are right — tariffs are good politics and help a narrow group of people, but often hurt the larger economy.
The scene is very heartbreaking. The camera slowly pans across a small town with a rich heritage. But the factory that provided jobs isn’t open and the shops on Main Street are closed. They begin an interview with an older person that has a sad story about losing their job and their health insurance. They lost their jobs due to cheap steel that was imported from China, or aluminum from Canada — the good jobs never came back.
This is an incredibly sad story, and it’s repeated so often that the idea of cheap Chinese steel or Mexican imports destroying jobs has become an article of faith in these communities. This is where the politicians come in. Politicians are just as self-interested as anybody else, and they want re-election. The best way to drum-up support is to look like they are saving people. They have angry, unemployed voters in their districts and promises to help them through earmarks, public construction projects, or protectionist policies will earn votes.
Donald Trump rode the wave of unemployed and frustrated voters throughout the Midwestern Rust Belt states, all the way to the White House. For better or for worse, these tariffs are a fulfillment of his campaign promise to simultaneously punish foreign companies that dump cheap products on the market, all while protecting US industry and labor.
This has inspired Trump’s economic advisor to resign, and sparked fears of a trade war. While the US economy is bigger and more diversified, it is not immune to market forces that would be unleashed through retaliatory tariffs. The Hawley-Smoot Tariff, passed in 1930, was designed to protect and help American industries suffering from the early effects of the Great Depression, but the resulting tariffs and counter-tariffs plunged America into worse conditions.
This is because a tariff is essentially a tax. If America taxes Chinese goods, China might tax American goods. Moreover, while the tariff helps one particular industry, such as US steel, there are many other industries, from construction to automobiles, that use and benefit from steel and aluminum. When these businesses expand because they have access to cheap goods, they have to buy additional machines and equipment to process the steel, which helps American companies that produce them. The workers in every one of those industries, from steel to transportation, then spend their paychecks at local businesses. In short, the cheap steel costs some jobs in steel factories, but adds even more jobs in other sectors.
As a general rule in politics, the simpler the argument the more strength it has.
This is why tariffs are good politics and bad policy at the same time. It’s really tough to make an argument to struggling workers that people in other states and industries benefit from free trade. This is an especially tough argument to make when the same politician already runs the risk of being seen as an out-of-touch, establishment elitist lecturing unemployed Americans on abstract concepts like free trade.
As a general rule in politics, the simpler the argument the more strength it has (as we’ve seen with the ban the AR-15 craze). It’s much easier in contrast for a politician to hold a news conference in front of a shuttered factory, talk about feeling their pain, maybe bite their lip and let their voice quiver, and then promise to take concrete actions to save American workers.
As we continue the debate, it’s important to consider what is best for America as a whole. Free trade is good for America and American workers, but there are fewer and fewer members of the Republican party willing to make that argument.
