U.S. Unilaterally Disarming in Trade War
Courtesy of our friends at EconomyinCrisis.org
While most politicians go out of their way to avoid the term “trade war,” which harkens back to the days of the Depression and protectionist tariffs, the fact is the United States is currently engaged in just such a battle.
Unfortunately, the U.S. is unilaterally disarming itself in the trade war by allowing China and other nations to get away with mercantilist practices with no consequences.
Much like the Japanese attempted to destroy America’s naval fleet ahead of World War II, removing a key element of the American war machine, America’s rivals in the trade war have tried to take out a key piece of the nation’s economic machine: its manufacturing base.
Since the 1970′s, American politicians of both parties have neglected the nation’s manufacturing sector in favor of expanded free trade in a rush to be at the forefront of the globalization movement. But “free trade” has been anything but beneficial to American manufacturers, and the problems have only accelerated in the past two decades, right along with the pace of globalization.
American producers were already struggling to keep up with their low-cost foreign competitors before the North American Free Trade Agreement and China’s entry into the World Trade Organization, but soon after the situation grew exponentially worse.
Every day, an average of 14 American factories close their doors, with roughly three-fourths of those employing over 500 people while they were in operation.
Most of those factories didn’t go out of business. Instead they chose to pack up and move their operations to Mexico, China or India, where wages are cheap, environmental and labor standards almost non-existent and profits are bountiful. Iconic American companies such as Coca Cola, Ford, RCA, General Motors, General Electric and Nokia have all opened up assembly plants in Mexico. In fact, GE employs 30,000 Mexicans in 35 factories in that country.
Because of disastrous “free trade” agreements and our membership in the World Trade Organization (WTO), Americans are now forced to compete with China’s 113 million-strong manufacturing workforce, who earn an average wage of 81 cents-per-hour, just three percent of their U.S. counterparts’ pay, according to the U.S. Bureau of Labor Statistics. Mexico, whose 10.7 million industrial workers average just $2.92 per hour, is only slightly better.
But instead of responding with tariffs and other policies to level the playing field for U.S. manufacturers, the American people have been spoon-fed academic arguments, such as “free trade” is the best for everyone economically over the long run or that free trade brings freedom or prevents war.
Unfortunately, “free trade” is an academic luxury of ivory tower elites that average Americans can ill-afford. Contact your Congressperson, demand we start protecting American jobs and the American economy.