Why Aren’t You Supporting the Trump Tariffs?

Take your pick:

1. They will lead to a destructive trade war.

2. They will lead to a massive economic depression, like the 1930s.

3. They will make prices and unemployment rise at the same time, like in the 1970s.

4. They will disappear our savings and pensions as the stock market craters, like in 1929.

5. And to save democracy, WE SHOULD NEVER SUPPORT TRUMP ON ANYTHING!

The United Autoworkers (UAW), one of the most progressive unions in the country, isn’t buying any of this. For now, it supports the Trump tariffs on cars and trucks. As the UAW puts it:

This is a long-overdue shift away from a harmful economic framework that has devastated the working class and driven a race to the bottom across borders in the auto industry. It signals a return to policies that prioritize the workers who build this country—rather than the greed of ruthless corporations.

But if you don’t like the Trump tariffs and you don’t support the UAW’s position, then what is a progressive position on trade? Does Bernie have one? Do you have one?

For more than thirty years, the UAW and other unions and progressives have fought free trade deals like NAFTA, adopted in 1994, which in the succeeding decades have brutally undermined American working-class jobs and communities, especially in the industrial areas of the Midwest.

The argument against free trade was simple: Allowing corporations to flee easily and rapidly to low-wage countries put them in a competitive race to the bottom in pursuit of cheaper wages and less costly working conditions. This was especially true in the better-paid U.S. manufacturing industries. Company negotiators threatened job relocation or reductions in virtually every collective bargaining effort with industrial unions.

Corporations said it again and again: “Accept wage and benefit concessions or we’ll move the plant to Mexico.” For labor unions that was a lose-lose proposition. Take less money and benefits and undercut your standard of living or hold fast and lose your job.

The Democrats, led by Bill Clinton, put together enough votes to pass the deal, and they have been paying the price ever since. Sherrod Brown says that what he repeatedly heard in his failed senatorial campaign last year was how the Democrats destroyed jobs via NAFTA.

Allowing corporations to easily relocate abroad has been a key element of the neoliberal march to rising inequality. Free trade involves a trade-off, it was argued. More workers would get jobs in growing export industries than would be lost in manufacturing. And the rise of cheap imports would lower the prices of goods workers bought, effectively giving them a pay raise.

Of course, the reality was that the new non-union working-class jobs pay far less than the unionized ones that were lost, and the working-class knows it. And while cheaper goods from Walmart likely offset some of the material sting, moving down the socio-economic ladder is painful and cancels the American dream.

After years of railing against this Faustian bargain, progressives are now watching Trump protect US industries through massive tariffs. The goal, he claims, is to bring back the jobs that were lost.

Progressive Democrats are stuck with a painful dilemma. If they oppose the tariffs across the board, they will be siding with the financiers and CEOs who have profited wildly from low or no tariffs, and have ushered in runaway inequality and increasing job insecurity. (See Wall Street’s War on Workers.)

But Democrats on the left so detest Trump, that it’s nearly impossible for them to join with the UAW to support the tariffs. Unless a new path is forged, progressives will find themselves in an unholy alliance with the Wall Street neoliberals and against the working-class, sounding the death knell for any kind of progressive-worker alliance to build an alternative to Trumpism.

What is a Progressive Trade Policy?

Bernie Sanders is attacking the Trump tariffs by playing his Vermont card, since the state has extensive economic ties to Canada. His key is focusing on working-class jobs:

Given Vermont’s long-established economic ties with our Canadian neighbor, the impact on our state will be even greater. We need a rational and well-thought-out trade policy, not arbitrary actions from the White House. I will do everything possible to undo the damage that Trump’s tariffs are causing working families in Vermont and across the country.

But just what would a “well-thought-out trade policy” look like?

Border Adjustment Tax

The goal of a worker-oriented trade policy is to take wages out of competition. That could be most easily done through a tariff called a border adjustment tax. The tax covers the difference in wages between the low-wage and high-wage workers, something that is easily calculated. If wages are nearly identical there would be no need for a tariff.

There’s also a refund for high-wage U.S. exporters. When a U.S. company exports a high-wage product, the U.S. exporter would receive a rebate. That rebate would be equal to the difference between the higher U.S. wage bill, and the lower wage received by workers in a comparable industry located abroad. Low-wage countries would be encouraged to increase their wages and high wage exporters in the U.S. would be rewarded by paying higher wages, therefore making the trade playing field flat as a pancake.

(Environmentalists developed this idea because they hoped to tax the difference between imported steel, for example, that was made by high carbon-emitting processes abroad, and the lower amounts emitted by U.S. steel producers. That would encourage both foreign and domestic steel makers to use lower carbon-emitting processes.)

Targeted Tariffs

When in 2024 John Deere and Company announced it was moving 1000 jobs to Mexico, in effect to finance higher CEO pay and stock buybacks for Wall Street investors, Trump threatened to impose a 200 percent tariff on any subsequently imported Deere products from that country. That sent the exact message workers wanted to hear: You move our jobs away to fatten your pockets, you get hammered.

Hard to argue with that proposition, but the Democrats did just that. Instead of dealing with how the job shift to Mexico was being used to finance stock giveaways to Wall Street, they rolled out Mark Cuban, who called the tariffs “insane,” because they would hurt Deere.

What About Countries with High-wage Labor?

Workers in export industries in northern Europe, Canada, and Japan have wages and benefits as high or higher than US workers. What’s the rationale, for example, to put tariffs on German-made cars? One reason would be to equalize tariffs in each country and in the long run move them towards zero. The other is to encourage them to increase production in the US.

Ironically, about 5,600 German corporations already have been moving to the US as they seek access to bigger markets and lower production costs. As many set up in low-wage states in the US South, they avoid the higher labor costs in Germany. Also, they have been taking advantage of lavish subsidies as states compete to attract jobs. Energy is also cheaper in the US and transportation costs are lowered. And finally, Germany makes certain high-quality products, especially in green energy, that aren’t yet produced here.

This suggests that a “well thought-out trade policy,” a la Sanders, with Germany should be the result of negotiations, not unilateral actions.

But Trump doesn’t do “well-thought-out,” which means his tariffs are a colossal mess, perhaps even the product of quickly produced ChatGPT hallucinations.

Yet opposing Trump across the board isn’t a well-thought-out approach either. It leads to the tone-deaf Cuban reaction that protects the status quo and avoids dealing with actual job loss caused by plant relocations to low-wage countries and the impact of such threats on collective bargaining. Which, needless to say, is the real problem.

The UAW is trying to make the distinction between supporting pro-worker tariffs and opposing other anti-worker Trump actions. As UAW president Shawn Fain recently said:

But ending the race to the bottom also means securing union rights for autoworkers everywhere with a strong National Labor Relations Board, a decent retirement with Social Security benefits protected, healthcare for all workers including through Medicare and Medicaid, and dignity on and off the job. The UAW and the working class in general couldn’t care less about party politics; working people expect leaders to work together to deliver results. The UAW has been clear: we will work with any politician, regardless of party, who is willing to reverse decades of working-class people going backwards in the most profitable times in our nation’s history.”

For progressive Democrats UAW’s approach will be hard swallow. First, it dilutes the all-out attack on Trump for every action he takes, each of which is viewed as an existential threat to democracy. And secondly, it forces the Democrats to deal with job destruction in the private sector, something they have failed to do for more than a generation.

A better approach would be for left politicians like Bernie Sanders to sit down with the UAW to hammer out a common progressive position. Where tariffs protect jobs and remove job relocation from negotiations, they should be supported. Where they kill jobs or simply attack high-wage countries for spite, they should be opposed and replaced by careful negotiations to create a low-tariff level playing field.

Let popular worker support for tariffs teach us that this issue requires problem solving, and support for any tariff should not signal failure on a leftist litmus test. The alternative, pure opposition to tariffs, which is where the entire Democratic Party and the left seems to be headed, is only likely to increase working-class support for MAGA. (See Dustin Guastella’s excellent review of the tariff issue.)

Jesus, how did we get into this mess?

Ask the Democrats who didn’t have the guts to challenge Biden’s decision to run again until it was far too late.