Special to WorldTribune , January 29, 2018
Commentary by David Morgan, Asheville Tribune
The economic gurus are up in arms over President Donald Trump’s placing a few tariffs on some products; this time on washing machines and solar panels. The general mantra used is that tariffs are a bad idea and that these tariffs are simply taxes that are not placed on products, but on people.
The logic of this all sounds good and rings with some truth in the higher echelons of intellectual pursuit. It’s too bad, however, that a substantial number of our legislators and economists never worked in a factory nor ran their own production lines. If they had, they would be not just aware, but acutely aware, of the difference between free trade and fair trade. Those words are by no means the same.
In the 1980s and 90s my family owned a furniture factory that manufactured furniture sold throughout the U.S. We employed about 60 skilled workers in a competitive environment. It was in those years that NAFTA came into being and that free trade with China became the rage.
We were told that globalization was going to solve the consumption problems of the world as all products would become cheaper for the consumer. Less expensive products were what were needed everywhere, and all were beneficial. Anything that might prevent that, such as tariffs or taxes, was somehow bad or evil.
What the U.S. economists, intellectuals, bureaucrats, and legislators failed to look at was not whether the trade was “free” but at whether it was “fair.” Perhaps the key reason for this is that very few of them had ever had any experience working in manufacturing.
There are myriad rules and regulations that manufacturers in the U.S. must deal with – OSHA, disability facilities, equal employment rights, minimum wage laws, sanitation rules, QMS Certifications, occupational health and safety rules, environmental compliances, insurance costs, workman’s compensation, and unemployment compensation, just to name a few – that many foreign countries can just ignore.
Trade with the U.S. may be “free” but certainly not “fair” for our U.S. manufacturers who must pay to follow hundreds of regulations.
One of the executives from Bassett Furniture went to China and was able to find the location of one of the factories that was copying a Bassett line of furniture. He went into the finishing room, which is normally very difficult and expensive to keep clean. He was shocked by what he saw. The area was chaotic and workers were covered in paint sprays. He asked the manager what they did for the workers? His answer was that they worked there for a year or so, and when they got sick, he hired new ones.
And we call this “free” trade?
Because of such an unfair playing field, it is the U.S. worker and owners who suffer extreme hardships and become victims of such “free” trade. They suffer from lost jobs, lost homes, lost savings and disrupted lives including schools and friends.
Where did we read that between 2001 and 2012 over 5 million factory jobs were lost and 63,000 American factories closed? (Ours was one of those factories.) At the same time China got over 14 million new jobs.
American ingenuity had developed the knowhow and skills, but China and others were able to copy what had been invented by us, at greatly reduced costs to them.
I can see absolutely no fairness in any of this. Enabling a consumer to buy a sofa or a washing machine for a little less money in no way justifies these incredible hardships, nor can it properly be called free trade. Five million unemployed Americans cannot exactly be called “enabled consumers.”
I think a great deal of this thinking is done by folks who are educated beyond their intelligence. If they could make the playing field truly “fair,” as Trump is trying to do, then we just might have a different story.
Don’t knock our tariffs until you know the complete story.