Josh Bivens of the Economic Policy Institute on why the criticism over tariffs has been misguided.
If you turned on the cable news networks or read an editorial page over the past few days, chances are you saw strong criticism of President Trump's announcement that he plans to issue a 25 percent tariff on steel imports (along with a 10 percent tariff on foreign-made aluminum).
Now, we haven't agreed with Trump quite a lot since he took office. But unfortunately, there has been plenty of widespread misinformation floating around the airwaves about the ongoing steel imports crisis, which Alliance for American Manufacturing President Scott Paul debunked in a post on Medium. It's been frustrating to watch for many of us here, as we know the devastation that China's massive industrial overcapacity has reaped on the industrial heartland for years -- and why we think strong, comprehensive action is now needed to finally address this unchecked global problem.
That's why we were encouraged to see an op-ed in The New York Times from Josh Bivens, the director of research at the Economic Policy Institute. In the piece, Bivens argues that while Trump deserves a lot of the criticism handed his way -- particularly on issues like immigration, taxes and race -- much of the pushback surrounding the steel and aluminum tariffs has been overblown. Bivens argues of the tariffs:
First, let’s take them for what they are: temporary relief for specific sectors (steel and aluminum) facing a specific problem (global excess production capacity, propped up by foreign governmental subsidies). America has taken steps like this before, and did not slide down any slippery slope to autarky. This means that big-picture principles — like, “Free trade is good,” or, “Globalization decimated the American working class” — aren’t very helpful in assessing them.
Bivens notes that pharma and software companies enjoy trade protections that many industrial workers don't receive (and you don't hear much criticism among business writers over that). And he adds that the tariffs aren't a final fix to this global crisis, but "can provide a countervailing force against these foreign subsidies and protect American metal producers until a comprehensive solution is found." Bivens continues:
It’s tempting to evaluate economic policy these days with a rule of “if Trump is for it, I’m against it.” After all, this rule would lead to the right stance far more often than not. But a better framework is to ask: “Is it good for the bottom 90 percent of American workers and the families they help support?” And on this latter question, criticism of last week’s tariffs largely misses the mark.