Caption: Bahamas flag container ship, Myriad, Iyo Nada, Seto Naikai, Japan. February 23, 2023. Credit: EZEK, Flickr

Trade policy has historically been a difficult topic for the labor movement. On the one hand, many regard “free trade” as a pathway to corporate exploitation of workers both in the United States and in foreign countries. On the other hand, activists cringe at the “protectionist” label, with the nationalistic connotations the term carries.

To understand Donald Trump’s executive actions to impose tariffs, and to situate them in historical perspective, we need to move beyond dichotomous debates over free trade and protectionism. The polarizing and totalizing rhetoric of such labels ultimately fails to capture the complexity of U.S. trade policy and, as a result, has produced few tangible results for workers struggling with the economic changes arising from global trade.

Instead, we need to consider the specific content of trade policies and the means by which they are applied. When, why, by whom, and how are tariffs imposed? Which industries are identified as in need of protection? Are these protections temporary, and on what conditions will they be removed? Are protections applied universally, or do they target specific exporting countries? Finally, do trade policies include specific guarantees to workers, whose interests do not always align with those of employers? Such an analysis offers labor activists greater space to critically engage with the politics of trade in a nuanced way.

At a most basic level, tariffs, also known as import duties, are taxes on imported goods. The logic of imposing tariffs is that they raise the prices of imports and thereby encourage consumers to purchase domestically produced products. For this reason, consumers often have an interest in keeping tariff rates, and by extension prices, low.

As the history to follow demonstrates, trade policy entails difficult tradeoffs that, at times, involve competing interests among workers in different industries. The politics of U.S. trade policy has historically been marked by conflict between export-oriented industries and those most deeply impacted by import competition. Export industries, and the workers in those sectors, have historically been interested in opening global markets. They have opposed U.S. tariffs because they fear that such tariffs will spark retaliatory action by U.S. trading partners. By contrast, workers and industries facing competitive pressures often have incentives to demand tariffs or other forms of protection.

Trade Policy before World War II
Throughout the nineteenth and into the twentieth century, Congress formulated U.S. trade policy. Rather than negotiate rates with trading partners, Congress legislated tariff rates as it saw fit to benefit constituents and raise federal revenue. Tariff policy often became a venue for Congressional horse-trading, as representatives negotiated among themselves for rates that would benefit their home districts. In the lead-up to the Civil War, trade policy exacerbated sectional rivalries. Budding Northern manufacturers sought protection from British textile imports, while Southern cotton exporters opposed tariffs that raised prices on manufactured goods.¹

[In] the twentieth century . . . several developments . . . set the United States on a path toward prioritizing tariff reduction.

Congress’s preeminent role continued into the twentieth century, but several developments in these years set the United States on a path toward prioritizing tariff reduction. During the late nineteenth century, the United States became an industrial powerhouse. By the early twentieth century, the United States was no longer a “developmental state” that needed protection to nurture young industries. Instead, it became a major competitor in global export markets—a process that would culminate in unquestioned U.S. dominance by the end of World War II.² As industrialists sought access to foreign markets, reducing foreign trade barriers replaced imposing protective tariffs as a political priority. With rising economic clout, moreover, came the emergence of a “consumer society” with an interest in lower prices.³

At the same time, the introduction of the federal income tax during Woodrow Wilson’s presidency reduced the importance of tariffs as a source of national revenue.⁴ Moreover, Wilson himself prioritized open and nondiscriminatory trade in his so-called Fourteen Points, which outlined the United States’ aims in World War I. In his view, international trade would secure peace by fostering interdependence, alleviating international rivalries, and disincentivizing warmaking.⁵ Despite Wilson’s advocacy, however, the 1920s marked a period of limited U.S. engagement in global affairs. Congress did not approve U.S. entry into the League of Nations, nor did it radically alter its policies on tariffs and trade.⁶

The infamous Smoot-Hawley tariff served as the high water mark for congressional tariff setting. The 1930 legislation raised tariff rates on 890 items, lowered tariffs on 235 products, and left tariff rates on 2,170 items unchanged.⁷ Most economists agree that the Smoot-Hawley tariff did not cause the Great Depression. Nevertheless, tariff increases by the United States, quickly followed by similar measures by Western Europe countries, resulted in a downward spiral in international trade that exacerbated the Great Depression’s effects and hindered the prospects of recovery.⁸ Struggling to climb out of the economic doldrums, U.S. policymakers sought a new approach.

. . . authority over trade policy [passed] from Congress to the president . . . in the emergency context of the Depression . . .

The Reciprocal Tariff Agreement Act of 1934 (RTAA) marked a revolution in U.S. trade policy. The brainchild of Secretary of State Cordell Hull, the RTAA authorized the executive branch to negotiate tariff reductions with U.S. trading partners. At the time, many regarded the passage of authority over trade policy from Congress to the president as a far-reaching expansion of executive power.⁹ Such an expansion of executive authority in the emergency context of the Depression was a hallmark of the New Deal.¹⁰ Presidential authorization to reduce tariffs under the RTAA remained time-bound, however, and Congress reevaluated its merits each time the legislation came up for renewal.

The Postwar Era: Reciprocal Trade Policy and Its Weaknesses
The principle of multilateral, reciprocal trade negotiations became institutionalized after World War II. The United States and twenty-two countries agreed to the General Agreement on Tariffs and Trade (GATT) in 1947. The GATT provided an institutional avenue for government leaders to gather in a series of negotiating rounds, with the ultimate goal of lowering trade barriers altogether.

In general, the U.S. labor movement endorsed the United States’ postwar trade program. The United States’ largest unions maintained a strong interest in promoting trade liberalization because they represented workers in export-oriented industries like steel and autos. Major union leaders also agreed that policymakers should prioritize economic reconstruction in Western Europe and Japan in the context of the early Cold War. Supporting Western European and Japanese recovery would secure the United States strong allies in its contest with the Soviet bloc. War-ravaged economies relied on imports from the United States to supply basic necessities but could not afford these goods without substantial U.S. assistance. Such assistance came not only in the form of Marshall Plan aid but also in efforts to open U.S. markets to their exports.

Union leaders, however, insisted upon the necessity of trade-adjustment assistance, which they considered the most effective strategy for supporting workers in import-affected industries like textiles and shoes. Union leaders recognized that import competition in these sectors would lead to factory closures in some working-class communities, even as the nation as a whole would benefit from international trade. As a result of union lobbying, Congress therefore established a trade-adjustment assistance program under the Trade Expansion Act of 1962. The program provided unemployment compensation as well as retraining and relocation funding to import-affected workers seeking new employment in growing sectors of the U.S. economy.

As a result of [postwar] union lobbying, Congress . . . established a . . . program [to assist] import-affected workers . . .

Congress also inserted “safeguard measures” into postwar trade legislation to address concerns about the employment impacts of import competition. An “escape clause” authorized the executive branch to raise tariffs in cases where imports directly threatened domestic industries. In addition, a national security clause authorized the president to restrict trade to protect U.S. defense industries. Finally, antidumping provisions in trade legislation allowed for trade restrictions on goods that were exported from foreign countries at prices lower than the same goods sold in exporters’ domestic markets. The GATT also included “safeguard” measures, but these were at times ineffective, leading countries to address import competition through other means.¹¹

When presidents did impose tariffs to restrict imports, foreign governments often took retaliatory action. In March 1962, for instance, John F. Kennedy invoked the escape clause to increase tariff rates on carpets and sheet glass. Three months later, the six countries of the European Common Market (the predecessor of the European Union) responded with tariff increases on U.S. chemicals, synthetic fibers, and paint products. Kennedy’s action to address one industry’s concerns thus had negative repercussions for another sector of the economy.¹² Presidents therefore denied industry requests for protection in some cases to avert diplomatic conflict.¹³

Several factors contributed to organized labor’s growing disillusionment with the U.S. program during the 1960s. Because the AFL-CIO had conditioned its support for the Trade Expansion Act on the implementation of a trade adjustment assistance program, successive administrations’ failure to provide aid to import-affected workers ultimately undermined organized labor’s support for the reciprocal trade program. The Tariff Commission often denied petitions for trade-adjustment assistance on the grounds that they failed to demonstrate that imports had been the main reason for the industry’s struggles, as required to qualify for the program.¹⁴ This eligibility criterion presented a high threshold for obtaining relief. As a result, the Tariff Commission rejected all applications for assistance until the Nixon administration liberalized the program’s eligibility requirements in 1969.¹⁵

Moreover, the United States’ advantage in global markets waned by the 1960s as Western Europe and Japan restored their industrial might. By the 1960s, consecutive GATT negotiating rounds were not producing the results that many in the U.S. labor movement hoped for. In particular, they failed to address “nontariff barriers,” like customs regulations and import quotas (limiting the number of items permitted), which restricted U.S. access to foreign markets in these years.¹⁶

Nontariff barriers and government subsidies for exporters became especially pertinent issues in the steel industry. Simply put, the Japanese and European steel industries were not organized along the same lines as the U.S. industry. The European and Japanese industries were more centrally organized, and government institutions played more direct roles. Japan’s Ministry of International Trade and Industry, for instance, directed subsidies and other resources to nurture the industry’s expansion.¹⁷ To U.S. steel interests, the result was unfair competition in international trade, and the solution lay in the imposition of import quotas.¹⁸

By the late 1960s, then, Congress faced growing union and industry demands for quota legislation to limit the quantities of steel, textiles, and other products entering the United States.¹⁹ These efforts culminated in organized labor’s campaign for what came to be known as the Burke-Hartke bill, which Congress debated between 1971 and 1974 but did not pass.

The failed Burke-Hartke bill was organized labor’s farthest-reaching effort to restrict international trade in the twentieth century. The bill proposed a comprehensive trade program that would impose import quotas on most products. The quantity of allowable imports of any given product would be restricted based on the volume of U.S. production of the good during the late 1960s. These quota levels could be raised over time as U.S. production of an item increased, but the bill’s basic purpose would be to preserve a guaranteed level of national production.²⁰

The United Auto Workers (UAW), however, opposed the Burke-Hartke bill. In part, this decision stemmed from the leadership’s desire to advance international trade union cooperation in the face of globalizing capital. AFL-CIO support for the bill had rankled trading partners and deepened distrust of the U.S. federation within organizations like the Canadian Labor Congress. The UAW, moreover, represented workers in export-oriented aerospace and agricultural implements industries and thus maintained a significant economic stake in maintaining an open international trading system. The UAW thus campaigned for a program of enhanced trade-adjustment assistance and international regulation of multinational firms.²¹

Still, even the Burke-Hartke bill excluded several items. The quotas would not apply to component parts, since such imports were considered necessary to support U.S. production. Moreover, the legislation excluded items covered by voluntary restraint agreements, in recognition of ongoing diplomatic efforts to address trade issues through bilateral and multilateral negotiations.²²

The failed Burke-Hartke bill was organized labor’s farthest-reaching effort to restrict international trade in the twentieth century.

Indeed, by the early 1970s, the United States had entered into agreements on several occasions to limit international trade in certain products outside the scope of GATT. Such agreements technically violated the terms of GATT, revealing the weaknesses of the safeguard mechanisms written into the original agreement.²³ Nevertheless, they offered diplomats the means to reach compromise solutions when trade disputes arose, thereby averting conflicts over retaliatory actions. Often, restraints imposed under these agreements were considered temporary pauses to enable affected industries in importing countries to adapt to the rise of global competition.

The textile industry offers the most vivid example of how countries negotiated agreements beyond the scope of GATT to address the concerns of the United States and other countries about the effects of import competition. Representatives of sixteen countries agreed to a year-long agreement in July 1961. Under the agreement, signatories could ask trading partners to restrict cotton textile exports to predetermined levels when imports severely impacted their domestic industries. If an exporting country did not honor the request, the importing country could impose import restrictions to achieve the same purpose.²⁴ The following February, nineteen countries negotiated a new five-year agreement. Importing countries could still request a year-long freeze on exports from a given country, and a newly devised formula allowed the number of exports to increase gradually in subsequent years.²⁵

The United States also negotiated voluntary agreements on a smaller scale with countries like Japan to address import influxes in particular industries. As early as the mid-1950s, the Japanese government voluntarily restricted exports of cotton textiles to the United States in an effort to forestall unilateral action by Congress.²⁶ In a similar vein, Japanese leaders agreed in 1981 to restrict the export of automobiles to the United States for three years.

New Challenges in a New Era of Global Production
The voluntary restraint of Japanese auto exports offers an important reminder that trade protection for industry did not always translate to job security for union workers. Part of the way that U.S. auto firms “adjusted” to competition in the early 1980s was by relying more heavily on nonunion, often offshore, suppliers for parts production. The effects included plant shutdowns, automation efforts, and downsizing. The ultimate survival of the “Big Three” auto firms protected some U.S. manufacturing jobs, but it came at the cost of high unemployment in large pockets of the U.S. industrial workforce.²⁷

The voluntary restraint of Japanese auto exports offers an important reminder that trade protection for industry did not always translate to job security for union workers.

By the 1990s and early 2000s, the threat of U.S. corporations investing in offshore production had become a palpable reality. Improvements in communications and transportation technology had made the process of importing much easier for U.S companies, and many took advantage of the opportunity to shift production to countries where they would not be bound by U.S. labor standards. U.S. firms and their engineers continued to design products, but the physical production of those goods increasingly occurred offshore.²⁸

U.S. priorities in the Uruguay Round of GATT negotiations, which began in 1986, reflected the changing nature of U.S.-based business. U.S. negotiators sought intellectual property protections and new agreements on trade in services like banking. Many officials and business leaders believed the future of the U.S. economy lay in knowledge-based services and high-tech exports, with lower-cost production of consumer goods occurring in other parts of the world. U.S. negotiators also secured enhanced access to agricultural markets abroad, even as they agreed to eliminate quota arrangements that protected textile and apparel industries.²⁹

At the Uruguay Round, negotiators also agreed to dissolve the GATT and to establish the World Trade Organization (WTO) in its place. The decision formally institutionalized the agreements under GATT and eliminated voluntary agreements negotiated beyond GATT’s purview.³⁰ Instead, the WTO instituted new rules for resolving trade disputes between countries, which eliminated some of the factors that had impeded negotiated settlements under GATT. The United States has successfully brought cases of trade law violations against other countries under these provisions, and there have been fewer instances of unilateral U.S. action to impose trade restrictions through other processes since the WTO’s establishment.³¹

The WTO quickly became a symbol of the abuses of a free trade regime in the eyes of many labor and environmental activists, and its meetings became targets of massive protests in the 1990s and early 2000s.³² The major rallying point for activism around both the WTO and the 1993 North American Free Trade Agreement (NAFTA) was the lack of labor and environmental protections in trade agreements.³³ As Nelson Lichtenstein points out, NAFTA, like the WTO, included robust protections for investors but remained largely silent on labor issues.³⁴ The Clinton administration negotiated labor and environmental “side agreements” to supplement the original NAFTA agreement, but many U.S. labor activists found the new provisions inadequate.³⁵ The issues of labor and environmental standards and human rights protections re-emerged in activism against the People’s Republic of China’s accession to the WTO, which was finalized in 2001.³⁶

Activism on international trade in these years drew adherents on both the political right and the political left. On the left, activists called for transnational solidarity to advance an alternative vision of global trade—one that raised labor standards for all and encouraged democratic participation in the decision-making of international institutions.³⁷ Political rhetoric on the right, by contrast, described foreign workers as antagonists, often by invoking racist tropes.³⁸

Today’s tariffs reflect Donald Trump’s preference for bold, provocative action. His lack of hesitation, combined with frustration over perceived inaction by Democrats on trade-related issues, helps to explain why some in the labor movement have spoken favorably about these tariff actions.³⁹ At the same time, the use of the 1977 International Emergency Economic Powers Act to apply tariffs in some cases has drawn lawsuits over the extent and limits of executive power.⁴⁰ The far-reaching nature of these tariffs has also fueled criticism. Rather than target specific items and industries for protection, Trump has applied tariffs across the board—that is, on all exports—against specific countries.⁴¹

The outcomes of such decisions remain to be seen. Tariff supporters argue that, in the long term, higher costs will compel multinational corporations to relocate production to the United States and compel U.S. consumers to purchase American-made products. Others, however, warn that importers will merely pass on tariff costs to consumers in the form of higher prices, with potentially inflationary consequences. Moreover, the decision to impose far-reaching tariffs unilaterally rather than by diplomatic negotiations has led some trading partners to negotiate trade deals but has also provoked a number of retaliatory threats and actions.⁴²

In May, the AFL-CIO urged legislators to steer a middle course as they respond to tariffs imposed by the Trump administration. While insisting that Congress “must constructively push back on the Trump administration’s reckless, on-again, off-again approach,” AFL-CIO Government Affairs Director Jody Calemine rejected “a return to the failed ‘free trade’ status quo.” The Federation has instead called for “a thoughtful, targeted approach” that would use trade protections “strategically” to protect “vital” industries and to counter unfair trade practices by foreign countries.⁴³

The Federation has been particularly critical of the imposition of tariffs against Canada under the International Emergency Economic Powers Act, in part because many AFL-CIO affiliates represent workers on both sides of the border.⁴⁴ The United Steelworkers offers a prime example. At its April Convention, the union adopted a resolution in favor of tariffs to protect strategic industries. At the same time, the union called for exemptions for Canadian steel and aluminum imports. “Canada—a strategic trading partner for the U.S.—does not present a legitimate national security threat,” the resolution asserted.⁴⁵

While the AFL-CIO has criticized the Trump administration’s “erratic use of tariff threats,” it has opposed legislative efforts to roll back executive authority in imposing tariffs.⁴⁶ Most notably, Calemine urged Congress to protect executive authority to impose tariffs under Sections 232 and 301 of existing trade law. Section 232 of the Trade Expansion Act of 1962 authorizes the president to impose tariffs to protect industries considered critical for national security. Section 232 has provided the basis for Trump’s imposition of tariffs on auto parts, a move that has been praised by UAW leaders.⁴⁷ Section 301 of the Trade Act of 1974 authorizes retaliatory action against countries that impose “unjustifiable or unreasonable tariff or other import restrictions” against the United States.⁴⁸

While the AFL-CIO has criticized the Trump administration’s “erratic use of tariff threats,” it has opposed legislative efforts to roll back executive authority in [imposing tariffs].

In sum, trade policy is a complex arena where straightforward solutions that benefit all workers elude us. Trade policy is, however, only one piece of a larger puzzle, and it alone cannot resolve the challenges facing workers. Ultimately, no trade policy can support the U.S. working class unless it is accompanied by a strong labor movement and broader government policies that protect workers’ health and safety on the job, provide support during periods of unemployment, and prioritize an equitable distribution of corporate wealth.

The AFL-CIO has been clear on this point. “We should not fool ourselves that reindustrialization alone is the answer” Calemine wrote in May. “Manufacturing jobs are not magically good jobs. They are made into good jobs by collective bargaining.”⁴⁹

Notes 

Author Biography Melanie Sheehan is an assistant professor of history at Hartwick College. Her current book-in-progress traces how U.S. labor union leaders and economists thought about and influenced international trade and investment policy during the latter half of the twentieth century. Her research has been published in Enterprise and Society.