Liberation Day? Big business plays tariff games while workers pay the price
Trump calls April 2 'Liberation Day' and says his trade war will 'Make America Wealthy Again.' But as has always been the case, workers shouldn't expect to gain much from a policy crafted for capitalists. | AP
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Corporate-controlled politicians and big business CEOs keep pushing two big lies about trade. First, they claim free trade deals will “lower prices and grow the economy.” Then they say tariffs—taxes on imports—will “protect American jobs” but raise prices. But for workers, these policies aren’t really designed to help us or increase our standard of living. They’re tools for big business to control our wages and maximize their profits.
“All this crying about the effects of tariffs, I find it interesting because, to me, this is just Wall Street,” said Shawn Fain, president of the United Auto Workers, when being interviewed about Donald Trump’s “Liberation Day” tariffs. “Now that Wall Street’s upset about it, it’s an issue. Where was Wall Street when all these manufacturing facilities have been leaving the country in the last 30 years?”
Historically, the pattern for capitalism is clear. When industries are weak, corporations demand protectionism to block foreign competition. Once they dominate the market, those same companies push for free trade to exploit cheap labor elsewhere and rake in the profits. Workers lose either way. Protectionism keeps prices high while wages stay low. Free trade lets companies outsource jobs to countries without unions, or weaker ones, and lower the average pay for workers everywhere in a race to the bottom.
Neoliberal free trade policies accelerated the offshoring of jobs from the U.S. The North American Free Trade Agreement (NAFTA) destroyed over 850,000 U.S. jobs since 1994. The more recent U.S.-Mexico-Canada Agreement (USMCA) closed some loopholes from NAFTA, such as establishing an autoworker minimum wage and instituting a rapid-response mechanism for labor disputes, but it didn’t go far enough.
In 2018, Trump launched a trade war against China. He slapped heavy tariffs on steel, aluminum, and other goods, claiming it would bring back manufacturing jobs. The results were disastrous for workers, and jobs scarcely returned back to working-class communities.
Steel companies like U.S. Steel and Nucor saw profits jump. But instead of raising wages or hiring more workers, they bought back stocks to enrich shareholders. Meanwhile, farmers and manufacturers faced brutal retaliation. China hit back with tariffs on U.S. soybeans, pork, and machinery. Prices rose on everything from washing machines to car parts.
Tariffs are back on the agenda, with new import taxes announced for steel and aluminum, and a 25% tariff on imports from Canada and Mexico, plus an additional 10% on goods from China. There are also potential levies looming for chips and pharmaceuticals. The Trump administration’s actions have strained North American economic relations and raised the risk of the biggest trade war since the 1930s.
The MAGA “America First” rhetoric is ultimately a distraction. While workers are told to blame China or Mexico or Europe, the real problem is big business and the capitalist system as a whole. For instance, corporations like General Motors kept closing U.S. plants and moving work to Mexico—even after getting massive tax cuts paid for by the U.S. working class.
Really, the problem isn’t just “bad trade deals”—it’s what social force ultimately controls the economy—the capitalist class. Under capitalism, trade policy serves corporations, not workers. Tariffs are primarily used to protect the monopolies, not working-class jobs, no matter what Trump says. As was previously mentioned, the steel tariffs imposed in his first term primarily helped the steel monopolies, not the steelworkers.
Now with Trump ramping up the trade wars again and workers still reeling from inflation due to the effects of the COVID-19 pandemic, prices will inevitably continue to spike. Workers will pay more for basic goods and services while profits stay high. The average value of our labor power will continue to fall. Price gouging is the name of the game for big business.
Corporations will always chase cheaper labor. No tariff can stop that. No trade deal brokered by the capitalist class will fix it long-term. So, the times call for a different approach, a political one, where a worker-centered trade policy could be implemented. But it must be consciously struggled for.
Real solutions require challenging monopoly power over their dominance of our everyday lives—from what is produced to how it’s produced, what price it’s sold for, and how much of the surplus is appropriated and for what ends.
Some examples for a minimum program pushed by the working class and our organizations could be:
– Taxing corporations that offshore jobs and use the revenue to retrain workers in other fields.
– Implement strict price controls—if tariffs raise our costs, freeze prices on food, medicine, and housing so that we don’t pay the price for corporation’s profit motives.
– Fight for and enforce international labor rights so that trade deals without strong union protections cease to exist.
– Fight for public ownership of key industries, like steel and auto, and keep them out of big business’ hands.
Trump’s trade wars won’t save our jobs over the long term. At the same time, continuing neoliberal free trade also won’t help workers. The only real solution is united working-class political action—particularly at the international level. The struggle isn’t between U.S. and foreign workers, whether in North America or elsewhere. It’s between workers and the capitalists exploiting all of us.
As with all op-ed articles published by People’s World, the views reflected here are those of the author.
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CONTRIBUTOR
Cameron Harrison
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