Welcome to From Insults to Respect.

No doubt you have all noticed the recent commotion over the new US White House policy of raising tariffs on some manufactured goods. There are those who are enthusiastically supporting this, while others are vehemently arguing that we would be far better off sticking to the previous policy. Well, from my way of thinking, both policies have serious drawbacks. So, in today’s post I would like you all to consider a far wiser alternative, one that I call a “Regional Manufacturing Policy.” Before I explain this alternative, and why it would be so much better, particularly for respecting the environment, let’s review the current commotion as it stands now.

The Current Commotion

The new “raising tariffs policy” is being hailed by President Trump as just the beginning of a trade war that is “easy to win.” He is beginning with steel and aluminum while considering other tariff raises as well.

Countries that have established trade policies with the US after long and hard negotiations see this move by the Trump administration as a violation of trust and some are threatening retaliation. When the US administration said it might exempt Canada and Mexico, this led to other countries expressing that they are being treated disrespectfully for they have been US allies for years.

Why Trump has decided to focus first on steel and aluminum is not hard to fathom. He managed to win the majority of presidential electoral votes in the state of Pennsylvania by the slimmest of margins. When he campaigned there, he promised to raise tariffs to help the state’s manufacturing industry. If he doesn’t keep his promise, he would have about the same chance of winning Pennsylvania again in the next presidential election as a Nazi would in the state of Israel.

The reasons some support the raising of tariffs are several. The US has the knowhow to produce any of the goods that would be considered for a tariff increase. US workers are eager to do the job as long as it pays at least a living wage; that is, a wage that permits a person working 40 hours a week, with no additional income, to afford the basics for a modest but decent life, such as, food, shelter, utilities, transport, health care, and child care. Although other countries have workers who are willing to do the job for lower salaries, there are several benefits to the US if it sticks to having US citizens do jobs that can competently be done by them. Though prices may go up a few dollars per item if the US keeps manufacturing jobs in the US, people earning the money in the US will spend their earnings in the US, helping the national economy. Fewer US citizens will need to be drawing on welfare programs. There is a pride that goes along with having local workers being part of what keeps the country rolling along.

The argument that the cost of goods in the US would skyrocket if we didn’t rely on foreign manufacturing seems hollow to those who have lost their jobs to foreign workers. Many remember a time before their jobs went overseas. Products such as cars and refrigerators were being manufactured at affordable prices back then. Moreover, the price of a particular product is not based so much on what the workers get paid, but on what the market will bear. The real reason the jobs went overseas, according to many advocating for the tariffs is not to keep prices for consumers down, but rather to increase the profits of corporations that distribute their financial windfall to their rich stockholders.

Complicating all of this is the fact that other countries buy some of the manufactured goods made in the US. If the US reduces foreign product purchases because tariffs make them too costly, foreign countries may raise tariffs on US products leading to making them so costly fewer foreigners will buy those products. Then those corporations’ employees in the US that are manufacturing these products will lose their jobs. Pennsylvania workers could end up with an improved job situation while other states will end up with a worse job situation. The complexities in this type of trade war make it extremely difficult to predict what the final outcomes will be.

In broad strokes, the above summarizes how the media describes what the tariff commotion is all about. What you don’t hear about is the major problem with both the new increasing tariff policy and the policy that existed before this commotion began.

Existing Trade Policies’ Effect on the Environment

Why is the trade policy we had prior to the new tariffs terrible for the environment? Consider Ford Motor Company that is located in Detroit. Ford could, under the prior trade policy, decide to buy the steel used to manufacture its cars from China, several thousand miles away, even if Canada has a steel plant a few hundred miles away eager to supply Ford all the steel it needs. Meanwhile, Toyota has an auto manufacturing plant in the Atlanta area. Rather than buy its steel from Pennsylvania, a few hundred miles away, it also can decide to buy its steel from China. The corporations may make this decision because Chinese workers are paid sufficiently less and the power plants that are used can be run at less expense because there are less pollution control requirements. The result is more profits by maintaining the current policy than if a decision was made to manufacture all manufactured goods within the region those goods are to be sold.

Note also that both Ford and Toyota use their plants to basically assemble their cars. The parts that they use in assembling the cars are made all over the world, from South Korea, Germany, Brazil, etc. And so, to manufacture a car in Detroit and Atlanta, thousands of huge ships are churning their way across huge oceans to bring all of these manufactured parts to seaports. According to an investigative report form the UK newspaper the Daily Mail, the 16 biggest ships in the world produce more pollution than all the world’s cars. This is because of the higher levels of sulphur oxides and nitrous oxides that large container vessels produce when compared to cars.

Once the ships dock into port, their cargo is then loaded onto trucks to further get these parts to the assembly plants. Then, when the cars are fully assembled, many are sent thousands of miles away for sale in South Korea, Europe, etc. All of this extra needless transportation leads to kicking out tons and tons of pollution for us and the next few hundred generations to breath and to suffer global warming consequences.

The alternative, raising tariffs plan, offers no real significant improvement in protecting the environment. Prior to Trump announcing his policy to raise tariffs, there were already numerous tariffs in place that were negotiated by all the concerned stakeholders. Despite that, millions and millions of miles of needless transportation was still going on. Meanwhile, the increase of tariffs lead to allies becoming enraged, lawsuits are already being filed, and final consequences of all of the stirred up ill will are unlikely to lead to benefits for all but a very few.

Regional Manufacturing Policy (RMP)

Imagine the United Nations coming to an agreement about a policy that is in the interest of protecting the environment. This policy calls for a three-year transition period that leads to all manufactured goods that are sold in a region being fully manufactured in that region, with the workers getting paid at least a living wage.

To envision what I mean by this policy, note that right now Toyota is a car manufacturing corporation centered in Japan and it manufactures many of its cars in that region. Nevertheless, it has opened a manufacturing plant in the US region, cutting some of the transportation requirements that would be necessary if it manufactured all of its cars in Japan.

Although this is a step toward a RMP, Toyota still has many of the parts that go into manufacturing its US made cars manufactured in other parts of the world. A true RMP would have all of the manufactured parts, including steel and electronic parts, made in the region those cars are to be sold.

To further envision what a RMP would require, imagine North America being divided into 5 or 6 regions, Europe divided into 2 or 3 regions, and so on. If Apple intends to sell its iPhones in each of these regions, it would be required by RMP to create manufacturing plants in each of these regions, thus dramatically reducing miles of transportation, along with the pollution that goes with it.

In thinking about RMP, some will find themselves concerned about all of the jobs that will be lost in the transportation industry. But note that within a few years driverless vehicles will become a practical way to transport goods, so it is now time to begin to help these workers to learn new skills for the jobs of the future. A humane way to make this transition is to extend unemployment benefits long enough for these transportation workers to learn these new skills and to make the training affordable.

Benefits of RMP extend well beyond environmental considerations. Tariffs produce anger, feelings of disrespect, and reprisals. Imagine, instead, a world that has its citizens joining together to make RMP work because it is the right thing to do for our planet and for future generations.

Admittedly, the current trade winds don’t appear favorable for the path I am here advocating. Just as I was completing this post I happened to glance at today’s New York Times and saw the following headline:

“E.P.A. Prepares to Roll Back Rules Requiring Cars to Be Cleaner and More Efficient.”

The article goes on to say, “The Trump administration, handing automakers a victory, is preparing to announce an effort to weaken strict Obama-era pollution standards.”

Yes, such news is understandably discouraging. Nevertheless, any fine sailor will tell you that it is common for a journey to meet up with stormy seas, and yet all the mates working together still succeed in bringing their ship into their desired port.

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