Enforcing Trade Rules is not a Trade War

Enforcing trade rules is not a ‘trade war’

The recent tariffs on steel and aluminum have been characterized as trade war. This is weird, because countries often enforce trade rules with targeted tariffs and sanctions, and markets adjust. What’s the real issue?

[Stan Sorscher | March 9, 2018  | The Stand]

In the orthodoxy of free trade, tariffs are heresy. Any tariff suggests that the neoliberal free trade approach has failed and government intervention is required. Also, if we protect steel, then the “protectionist barbarians” all rush in and want import restrictions, too.

This begs the question, “Why have rules for globalization at all, if we won’t enforce them?”

The context for the recent steel and aluminum tariffs should start with a central message from the 2016 presidential campaign. Millions of workers and communities around the country feel left behind by our approach to globalization. We can do something about that ….. or not.

President Trump speaks in terms of win-lose or “everyone is out to get us.” But he is doing something. The advice from free-trade establishment experts seems to be:

●  We can’t do anything;

Capitalism is crazy

Capitalism is crazy.

NY Times documents how a company is destroyed sending jobs overseas.  California Teachers Retirement System is part of the destroyer team.

http://www.nytimes.com/2014/12/07/business/timken-bows-to-investors-and-splits-in-two.html?_r=0

Timken Steel of Canton Ohio.

…If he can’t, or if another company comes along with an offer too rich to refuse, Mr. Timken acknowledges what many in Canton would rather not say out loud. “If the number is big enough, the board is going to have to look at it and say, ‘Ugh, O.K., unless you can show me a plan that’s better than that, we’re going to take it,’ ” he said. “We’re a publicly traded company.”

As in all publicly traded companies, TimkenSteel’s board and top executives have a fiduciary duty to shareholders to maximize both profits and investor returns. For many companies in the region, that has meant cutting costs and moving production to places where labor is cheaper. Goodyear Tire & Rubber, for example, was founded in nearby Akron in 1898, but Goodyear hasn’t made regular tires in the onetime rubber capital of the world in more than three decades….

“The professor said we’d all be bankers and consultants and lawyers and health care professionals,” Mr. Timken recalled. “There’s a role for those people, but the ripple effect of manufacturing is dramatically higher than the ripple effect of banking. It creates wealth. And countries that have let it slip away have suffered.”