World War I was supposed to be the war to end all wars but approximately two decades later WWII occurred. The victors of WWII came together at the end of the war to implement global policy that would stabilize the economies of individual countries and their relationship to one another, with the desire to prevent a WWIII. It was determined that the use of tariffs and the trade wars they precipitated were one of the major destabilizing economic factors that led to violent conflicts. The agreed upon solution was the General Agreement on Tariffs and Trade (GATT) which was designed to lower tariffs around the globe through negotiated agreements between participating countries which resulted in our current era of globalization.
The GATT (agreement) evolved into the World Trade Organization (WTO) that exists today. The trade agreements that were implemented had a major flaw. We allowed multinational corporations to dominate the negotiations and implement free trade which allowed those corporations to exploit labor and cause harm to the environments of developing countries. The United States, as a developed country, was also harmed because our manufacturers could not effectively compete against countries that had labor and environmental standards much lower than ours. This resulted in a decline in U.S. manufacturing and what became known as the Rust Belt in America. Political unrest increased in the Rust Belt with the destabilization of their economies and contributed to the election of Donald Trump.
The solutions we need to promote are Fair Trade agreements as a replacement for the Free Trade agreements we now have. Free Trade agreements need to be renegotiated by countries that support the working class into Fair Trade agreements designed to bring the bottom up in regards to labor and environmental standards. Multinational corporations should not be allowed to dominate these trade negotiations as they have in the past with their exploitative agenda resulting in a race to the bottom.
Trump’s new tariffs are wrong for historic, economic and legal reasons. His tariffs move the world back to historic times of economic instability and uncertainty. Trump does not understand that instead of increasing tariffs, the world must move from Free Trade to Fair Trade. Unfortunately, Trump and his advisors appear to have a bias toward wealthy individuals and wealthy corporations, so I am doubtful they will ever fully understand the need to implement Fair Trade agreements. Montana’s Congressional delegation also appears to have the same bias toward the rich to the detriment of our working class. The first step that Americans and our elected officials must take is to conclude that the Constitution gives congress authority over tariffs and that Trump’s disastrous illegal tariffs are taking us in the wrong direction. Then future elections must replace our current Congressional delegation and President with individuals that support replacing our current multinational corporation Free Trade agreements with working class Fair Trade agreements.
Ron de Yong is a retired farmer, former Montana agriculture director, and economics lecturer at Cal Poly State University. He lives in Kalispell.