If one looks for commentary regarding Donald Trump’s recently imposed tariffs on steel and aluminum imports, they will find that most of those comments come from a Wall Street point of view. In other words, the remarks are concerned with how the tariffs will affect profits. A couple union executives have stated that the tariffs will be good for US jobs in the affected industries. In other words, steel and aluminum workers should have more work in the short term. However, other industries, like the automobile and canned goods industries, may suffer job loss because the costs of their materials will rise. This rise will mean the owners of said businesses will increase the cost to consumers. Since wages are pretty much stagnant across the United States, this will probably mean that fewer finished products made from steel and aluminum will be sold, which could very well cause layoffs in those industries, their suppliers and their sellers. This could in turn eventually result in layoffs in the steel and aluminum industries as well. In other words, the only sectors of the economy that can be certain to make money on this deal—at least in the short term—are a limited number of corporations and financiers. Even they cannot be certain.
Of course, some financial speculators have already started betting on the tariffs. In the days immediately following the tariff announcement, numerous news agencies reported that Carl Icahn, a billionaire investor and Trump’s former special adviser to the president on regulatory reform, sold tens of millions of dollars of associated stock in the days preceding Trump’s tariff announcement. While the sale may not have resulted in huge profits, the sale prior to the announcement meant that Icahn would not see his holdings plummet in value once the market reacted to the tariffs. Other speculators are most likely taking advantage of the dip in stock prices of those companies affected by the tariffs and buying them up. Once the prices began to rise, which they most likely will, those investors will reap the benefits.
Meanwhile, the working people of the US will probably never see any lasting economic benefits from these tariffs. Sure, some workers in the industry will feel that they have more job security; some may even see raises and many will probably get more overtime. Yet, those workers will not be immune to the rise in consumer prices, so the likelihood is they will not come out ahead very much if at all. These tariffs are not for the benefit of workers. They are an attempt by a faction of the US ruling class to squeeze more profit from a system in crisis; to internalize the neoliberal system as much as possible. The livelihoods of US working people are secondary at most in their list of concerns. Just as the system of capitalism is global in nature, so must the resistance to it be. When national governments present protectionist measures like tariffs as a solution to the problems working people face they are misleading the people. The only solutions to the problems facing working people around the world are those which are internationalist in their understanding and in their practice.
As a person who wants capitalism sent permanently to the dustbin, I have a feeling these tariffs could nudge the future in that direction. After all, the US is only one power in the world of global capitalism, and not always the strongest. Indeed, the imposition of tariffs could be a sign of weakness, not of strength. They could also backfire in ways quite dangerous not only to the general public, but also to Wall Street itself. Many pundits in recent days have brought up the 1930 Smoot-Hawley Act which imposed tariffs on 20,000 imported goods and provoked a trade war that exacerbated what became known as the Great Depression. Champions of the mythical free market (Milton Friedman among them) dispute(d) the idea that Smoot-Hawley had much effect on the depression at all, choosing to blame the Federal Reserve instead. The trade wars that ensued arguably led to World War Two. In actuality, the causes of the Great Depression were considerably deeper. The tariffs were a contributing factor but not the crucial element. Looking back, it is clear that the Depression was a drastic example of how capitalism works. Indeed, it was a market correction to top all market corrections.
Trumpists believe the current “free trade” deals like NAFTA are somehow unfair to US industry and banking. This is apparent in their attempt to exempt Canada and Mexico from the tariffs if they agree to certain changes in the current NAFTA. Although it is fairly clear that these trade agreements are harmful to workers around the world, the changes the Trumpists have in mind are not designed to improve the lot of workers. Like the “free trade” agreements themselves, the changes are primarily designed to improve the stock value of various corporations and financial houses. Working people around the world should be wary of those who claim that actions of the capitalist class are for their benefit. This is true when discussing the WTO and its gospel of “free trade”; it is just as true when the agreements made in the name of “free trade” are challenged or torn up by those in the capitalist class. When the Trumpists tore up the Trans Pacific Partnership (TPP) they did so because their ideas about maximizing profit for their friends on Wall Street didn’t jibe with the ideas of those in the capitalist class who supported the agreement. While both factions tell the public that their approach to capitalist trade will benefit the public, they are only providing part of the story. Any benefits workers obtain in a capitalist economy are the result of struggle, not the gifts of the owners and financiers. Supporting the tariffs because of some imagined short term gain is merely buying into neoliberal capitalism’s con game.