Global Research

Mid-week, President Donald Trump announced his intention to create a border wall with Mexico, making good on his incessant campaign rhetoric to “Build A Wall” and even make Mexico pay for it. While no one, including his supporters, realistically believed that Trump would actually make Mexico pay for a wall, Trump has surprised everyone by revealing that he can do just that . . .  at least in a sense. One of the ideas being floated to fund the construction of the border wall, among others, is the imposition of a 20% Protective Tariff on all goods coming in from Mexico.

As of yet, the tariff has not been set in stone but both the mainstream and the alternative media are now on fire with debates surrounding the efficacy, dangers, or benefits of protective tariffs and “protectionism.” Yet much of the hysteria over tariffs coming from both mainstream and alternative media outlets is nothing more than the propaganda of globalization and “Free Trade” that has been drilled into the heads of Americans for years by government, international corporations, Wall Street, the mainstream media, and a host of questionable “think tanks” and organizations so that they will accept lower living standards, lower wages, and the domination of society by corporate oligarchs.

While the question of illegal immigration and border walls are an important one – it is also important to maintain a proper understanding of tariffs, protectionism, Free Trade, and the risks and benefits of these policies in the real world.

The truth is that America desperately needs a shift away from globalization and Free Trade in favor of Protectionism and a real national economy based on high wages, high-skills, and production. The hysteria from both the alternative and mainstream media is thus greatly misplaced and based on misinformation.

The anti-Tariff argument generally goes something like this: If the U.S. imposes a tariff on imports coming from Mexico, then the companies making those products will have to raise prices of the goods they are selling inside the U.S. to pay for the tariff. This, opponents argue, is actually a form of taxation on the American people since they will have to pay more for goods shipped from Mexico.

Most of the individuals arguing against the proposed Mexico tariff, however, oppose all tariffs, suggesting that protectionism and tariffs are dangerous to economies and have a history of being so. Yet this is not an argument so much against the new tariff, it is an ideology and one that has been promoted by finance oligarchs for quite a long time, particularly over the last forty years. Indeed, even going back to the 1500’s, the question of establishing a world hegemonic order based on Free Trade was discussed at the highest level of British aristocracy.

Yet, one need only look around the world today to see the results of Free Trade and globalization. The Western world, once the standard bearer for living standards, labor standards, and quality of life is now a shell of itself, with unemployment numbers the highest since the great depression, low wages all around, increasingly poor working conditions, and the general decline in the standard of living. The third world has absorbed these jobs but they fill their employment roles with slave labor, virtual slave labor, and bare subsistence living. In fact, living standards are no better than they were before and, in many cases, they are worse due to the fact that people are now worked to death as well as being subject to the pollution of the companies that have sought out their country for the lack of regulation.

In short, we have an example of economics based on low or no tariffs and, if tariff opponents are suggesting that Free Trade and globalization are the way to go, they need to be laughed out of the building. Forty years of their economic strategy has turned a country of high wages and the biggest middle class in world history into a nation of unemployed, struggling workers competing for minimum wage jobs amid a collapsing infrastructure, lower living standards, poorer health, and a food supply that scarcely resembles actual food. In other words, anti-tariff activists have their own results readily available to disprove anything they have to say.

Tariffs have always been generally positive and beneficial to national economies going all the way back to the English Corn Laws, the removal of which cause massive social upheaval and agricultural collapse and, conveniently, a flight to the cities where thousands and thousands of destitute, broke, and starving people had no choice but to compete for work in abysmal factories for extremely low wages and an early death. It was, no doubt, a nightmare for the vast majority of British people but it was also a Free Trader’s paradise.

Likewise, America’s economic glory days – the 1950s to the early 1960s – were based on a system of tariffs and protectionism, among other factors now considered taboo by Free Trade fetishists. In fact, it was the systematic dismantling of tariffs that gradually reduced the American work force over the ensuing decades before the “giant sucking sound” of NAFTA turned the job exodus up several notches. Indeed, the subsequent trade deals like CAFTA and the various bilateral deals with China and other “developing” countries have exacerbated the problem that much more, even making NAFTA pale in comparison.[1]

Tariffs are a necessary part of a healthy national economy and must be revived if anything resembling reasonable living standards are ever going to return to America.

So Trump’s plan to place Tariff’s on products coming in to the United States is a positive one. However, it is also much too small to effectively revive the American economy by itself. With so many interweaving trade pacts having been signed over the last three decades, a 20% tariff on goods coming in from Mexico might not necessarily bring jobs back to the U.S. In fact, it might only make these companies shift production from Mexico to some other South American sweatshop country. The reality is that the Trump administration needs to implement a much larger tariff that will affect more countries than Mexico. We need an across-the-board tariff that applies to all imports, with the exception of goods that cannot be produced adequately at home. 20% is a good starting point and could be adjusted up or down depending on specific goods.

Either way, the United States has to make it clear that it is going to be vastly more expensive for companies to produce items outside the country and ship it in than it is for them to produce the same material inside America’s borders.

But anti-protectionists doth always protest too much. They respond by arguing that producing goods in the United States will drive costs of those products up and actually make a bad situation worse for most Americans. Being completely honest, we must admit that their fears are not completely without merit. Labor costs and regulations are higher in the United States for sure. That is part of the reason that major corporations have been moving overseas for years – i.e. to take advantage of legalized rape and pillage of the environment and workers in less developed nations. For that reason, an argument for further globalization and Free Trade is essentially an argument supporting the exploitation of the poor and working class. One can hide the fact in political language or dress it up as anarchy or based on the concept of freedom and choice all he likes, but it is still clear support of exploitation nonetheless.

To the question of higher prices, it is important to point out that the predictions of scorched fields and cities full of despondent shoppers hopelessly looking through storefront windows at plastic gadgets they can no longer afford to buy is nothing more than a scare tactic. Before the concept of Free Trade took was forced down America’s throat (despite the opposition of the American people), America produced its own goods in America and everything was just fine. In fact, they were much better economically speaking than they are today. We did it once so why can’t we do it again?

Arguing that prices must go up is also disingenuous. Corporate boards and CEOs always have the option of making $8 million a year as opposed to $9 million. Of course, we must allow reality to set in and realize that, for corporate fat cats and Wall Street, making less is never an option. This is precisely why tariffs are indispensable.

To be clear, the imposition of protective tariffs must not only be across- the-board, it should be accompanied by other policies designed to raise the standard of living such as increasing the abysmally low minimum wage to that of a living wage.  A nation of full of minimum wage jobs is not the version of the American economy that anyone other than corporate overlords want to see. Americans need higher wages and greater skills, many of which have dissipated after nearly three decades of bouncing from one retail and service job to another.

The U.S. Federal government, through a nationalized (or at least partially nationalized) Federal Reserve offering credit stimulus and no-interest loans, must begin retraining and preparing a new generation of Americans to get back to work and get the economy going again, this time in a more environmentally friendly manner with new technology and greater awareness of dangers posed to the environment, animals, and human health. The minimum wage must be raised.

America’s economic glory years were built by a policy of high wages, high skills, and protectionism. Abandoning those policies was an act of foolishness by some and an act of treachery and treason by others. It is high time we began to reverse the policy of shipping American jobs overseas so that they can be manned by impoverished peasants. Decades of globalism and Free Trade have collapsed the Western world from within, America in particular, and has wasted the lives of millions of people in the developing world. Let the corporations and bankers scream as loud as they want. Let mainstream and yes, even alternative media outlets predict the end of the world. But Free Trade has had its time and that time needs to end now.

Notes

 [1] Tarpley, Webster Griffin. Surviving The Cataclysm. Progressive Press. 3^rdEdition. 2011.