March 13, 2002
By Thomas Sturgess
The Steel tariffs imposed by President Bush are the perfect
election issue for the Democrats.
When I heard that George W. Bush had imposed 30% steel tariffs
I remembered something, I remembered that in his election
campaign he was staunchly pro-free trade. Indeed in on his
campaign website he promised that...
"Like all Americans, Governor Bush wants to see
improved working conditions world-wide.
The best way to address this issue is not through unilateral
trade sanctions, but through international agreements. That's
why Governor Bush supports international reform efforts, such
as the International Labor Organization's "Convention
on the Worst Forms of Child Labor," and the World Trade
Organization provision that permits member countries to ban
imports made by prison labor.
At the same time we must guard against countries using
labor standards as an excuse to erect protectionist barriers.
The primary goal of our trade policy should be to open markets
abroad because the better way to raise living and working
standards is to increase trade."
What's more he kept plugging free trade as often as he could.
Post 9/1 the president announced that the attack on New York
was an attack on "free trade". "We will keep our
country open," he insisted, "and our markets open for
business." Until now. These tariffs represent more than
a cynical U-turn designed to win more votes in rust belt states;
they also show the quite explicit breaking of election promises.
The fact that promises are being broken on free trade is
bad enough but get this, a tariff is a tax. A stealth tax
that will cost you every time you buy a product that contains
steel, from electrical appliances to that Sheffield steel
cutlery set you wanted to buy your relative as a wedding present.
These tariffs will hit every business that uses steel. For
every steel producing job these tariffs save, they'll cost
10 jobs in the steel-consuming sector. These increased costs
will be passed onto you as a consumer, hitting the poor the
hardest as they have the least ability to pay. And he said,
"not over my dead body will they raise your taxes."
These steel tariffs will also do little for the steel industry
it is supposed to help by making US steel less competitive
overseas. After all what are these tariffs if not an admission
that US steel is competitive? There is also the risk of a
trade war in which beggar-my-neighbour tariffs will make beggars
of us all. Plus this measure will increase prices and reduce
demand at the worst possible moment in the economic cycle,
thus deepening the recession.
So the question has to be asked, what are the Democrats to
do? The answer surely is to go full tilt for the administration's
throat on this issue, campaigning for free trade. This is
in keeping with the "Third way" approach of Clinton
who was (and remains) an ardent free trader who created NAFTA
& the WTO. Campaigning for free trade will allow the democrats
to present themselves as the champion of the American consumer
over special interests and also draw in soft money dollars
from steel consuming industries (unethical I know but this
is, after all US politics.) Campaigning for free trade will
allow the Democrats to present themselves as internationalist;
altruistic and also pro free markets. This will allow the
democrats to capture the centre ground and also lure many
of those on the libertarian/Goldwater right who are up in
arms about this protectionist madness.
As I have mentioned, there is the broken promises part of
all this which the Democrats must also exploit to the best
of their abilities. The message needs to be spread that if
Bush cannot be trusted on trade, what can he be trusted on?
I believe that we can do this, many in the Media who would
normally be sympathetic to Bush, from the George Will onwards
have been very critical indeed and would give the Democrats
an easier ride if the Democrats were to go full tilt in favour
of free trade. This in turn might give the Democrats more
leeway to be progressive on other issues such as healthcare
In short free trade is one of the biggest and best ways for
the Democrats to hold the center and attack the president
and one which should now be used at every opportunity. Of
course things may change, the WTO might do what it is supposed
to do and reverse these tariffs (if the WTO does not then
it is doomed to become the free trade equivalent of the League
of Nations). However, for as long as these tariffs stand the
Democrats will have the perfect cannon fodder of broken promises
and bad economics with which to attack Bush and hopefully
take back the power from the special interests of the GOP.