Labor deserves better than Trump’s disastrous tariffs

Joe Mayall is a Denver-based labor activist and writer whose work has appeared in Jacobin, PRISM, and The Progressive Magazine. He writes the JoeWrote newsletter, and you can follow him on Blue Sky (@joemayall.bsky.social) and X(@joemayall).

During his second inaugural address, President Donald Trump stated he would enact his campaign promise to “tariff and tax foreign countries to enrich our citizens.” To the surprise and horror of many, including members of Trump’s inner circle, the President has followed through with his chaotic plans. With shifting country-specific rates and conflicting statements from press briefings and Truth Social, the president’s trade policy has upturned financial markets and left everyone from world leaders to small business owners scratching their heads.

As for why these tariffs were enacted, Occam’s razor points to a mix of ignorance and corruption. The president claims they are closing trade deficits, which he misunderstands as the amount a foreign nation is “stealing” from America. Trump boasted about how much he and his friends made manipulating the market, so one can’t discount that the tariffs are a means to personal enrichment.

The absurd rationale and design of the tariffs were only outdone by their implementation. Economists quickly deduced the administration was using an incorrect formula to produce the country-specific tariff rates. However, they’re changing so rapidly that it might not matter.

Just four days after the tariffs went into effect, the White House announced a ninety-day pause. China was the lone exception, receiving a 125% tariff, which was then increased to 145% to include tariffs for fentanyl, an illegal drug rarely disclosed at ports. Predictably, this has caused a trade war, with nations pledging retaliatory tariffs ranging from 25% to 125%.

As the public’s frustration builds with every point their 401(k)s fall, many wonder what the point of tariffs is and whether they can be used for good at all. UAW President Shawn Fain and Congressman Chris Deluzio—neither a fan of Trump—have praised some tariffs as necessary to protect American workers. While oppositional politics have Democrats condemning Trump’s plan, politicians from both parties would be wise not to overcorrect into anti-tariff absolutism.

Instead, they should propose a calculated trade policy that avoids the turmoil of Trump’s tariffs while fostering a dignified life for workers within and outside the United States.

Pair Tariffs with Domestic Investment

For most of the 20^th century, Democrats favored tariffs to deter offshoring production to countries with lower wages and lax labor protections.

Before the North American Free Trade Agreement (NAFTA), the United States tariffed the “value-added” on products shipped abroad for assembly and then re-imported for sale. This artificial cost cut into corporations’ profit margins, motivating companies to keep production in America. 

During the 1970s, a typical American automotive assembly plant used parts from over a thousand producers. But when NAFTA removed tariffs in 1994, production was consolidated in maquiladoras, foreign-owned factories in Mexico. By the turn of the millennium, American automotive plants only used between seven and eight hundred part producers, contributing to the estimated 850,000 American manufacturing jobs lost by NAFTA.

While targeted tariffs like those implemented before NAFTA are beneficial, Trump’s decision to tariff entire countries offers no advantage for workers. As the President’s plan taxes everything from the affected country, American consumers will have to pay higher prices for imported products, even if there is no American alternative worth protecting. Coffee is the foremost example of this problem. 

As coffee grows in tropical climates, only 1% of the coffee Americans drink is domestic. The rest is imported. As our leading coffee suppliers (Brazil, Colombia, and Vietnam) are now under heavy tariffs, Americans will be forced to pay higher prices, as there is not enough non-taxed domestic-grown coffee to go around. Here, Trump’s tariffs hurt American consumers as well as domestic and foreign coffee producers, who will see demand fall.

That’s why tariffs should be surgical, implemented only when the net benefit outweighs the costs. However, the U.S. can’t rely only on discouraging the consumption of foreign-made products. Washington must pair tariffs with domestic investments to create an effective trade policy that benefits workers and consumers alike. Fortunately, this concept is not novel, so policymakers don’t need to start from scratch. 

A good example of the tariff-and-invest strategy is America’s current tariffs on Asian solar panels, which were paired with the Inflation Reduction Act’s (IRA) $60 billion investment in green energy manufacturing. 

In 2018, President Trump placed a tariff on Asian solar imports, which Biden preserved when he took office. Combined with the IRA’s benefits, the tariffs motivated the South Korean solar panel manufacturer Qcells (and its parent company Hanwha) to move production out of China and into the U.S. In 2023, Qcells expanded its plant in Dalton, GA, with another plant scheduled to open in nearby Cartersville later this year.

While the full impact of the IRA funding and solar tariffs will take time to materialize, they provide a sound foundation for a labor-friendly trade policy. To ensure future investments benefit workers as much as capitalists, Congress could require any company that receives public investments to have a unionized workforce and ban them from buying back stock. Washington could even emulate the German Codetermination Act of 1976, mandating that companies benefiting from public policy give workers a say in managerial decisions through board seats and supervisory councils. 

A Leahy Law for Labor

Whenever tariffs are suggested, many critics claim that while they may protect American workers, they harm laborers in the developing world by keeping jobs in the U.S. Even when made in good faith, this critique misunderstands that reasonable trade policy protects all workers, foreign and domestic. Once again, NAFTA serves as an adequate example. 

Prior to implementation, free trade advocates argued the deal would improve the quality of life for foreign workers, specifically Mexicans. In reality, NAFTA harmed workers on both sides of the Rio Grande. 

After two decades of free trade, Mexico’s real wages remained stagnant at 1994 levels. While discussions about NAFTA frequently center auto and manufacturing workers, they weren’t the only victims. With Mexico’s tariffs no longer in effect, American-subsidized corn flooded the country’s food markets, wiping out approximately 1.9 million Mexican agricultural jobs and driving undocumented immigration. 

As American companies are known to offshore manufacturing to take advantage of easily exploitable laborers, Congress should pass a Leahy Law for labor. Just as the Vermont Senator’s namesake legislation bars weapons sales to human rights abusers, the United States should set a standard for ethical labor and place punitive tariffs on any company that violates it. This would apply upward pressure on global labor standards and eliminate the cost-cutting benefit of offshoring manufacturing, incentivizing companies to keep production in the U.S. Again, Washington would not have to devise such a policy from scratch. 

For over a century, the International Labour Organization (ILO) has published recommended labor standards designed to help world leaders implement trade policy that respects the international working class. Recently updated in 2019, the ILO’s handbook provides guidance on everything from child labor (no dangerous work for anyone under eighteen) to appropriate wages (no company vouchers or coupons). There are even tailored recommendations for specific industries (fishers, dockworkers, etc.) and marginalized groups such as migrants, pregnant people, and indigenous communities. 

With the intent to uplift the quality of life for American and foreign workers, adopting these standards and setting substantial, punitive tariffs for companies that violate them would benefit both American workers and their foreign counterparts. With companies deterred from offshoring to employ cheap, vulnerable labor, the American working class can rest assured that exercising their collective bargaining rights won’t result in their employer shipping their jobs overseas. 

While Trump’s chaotic tariff plan warrants condemnation, politicians should avoid slipping into anti-tariff absolutism. Not only are tariffs an effective tool in the trade policy toolbox, but domestic politics demands addressing the consequences of free trade. Those willing to throw the baby out with the bathwater and expel tariffs for good would be wise to remember that Donald Trump’s opposition to NAFTA made him popular with working-class communities that were once reliable Democratic voters. Running on a full return to the lost free trade regime of the past might temporarily thwart Trump, but it will not end the social and economic frustration that birthed his reactionary movement.