In July, the president of 1.3 million Teamsters, Sean O’Brien, spoke at the Republican National Convention. In that speech, he said that “we need trade policies that put America first.” He was essentially saying that American workers and American bosses are on the same side against foreign competitors (namely, China) and that policies protecting the profits of American bosses are good for the American worker. 

With the help of labor leaders like O’Brien, politicians across the political spectrum are promising that their new “protectionist” economic policies will help workers. But is that true?

Both the Republican and Democratic parties have adopted a new economic policy to fit the changing needs of the US ruling class in this new era of imperialist rivalry with China. What Trump and the Republicans call their “America First” agenda, Biden, Harris, and the Democrats call “Bidenomics” – different labels for policies aimed at keeping US imperialism ahead in this new era. 

Most of this “economic populism” is what economists call protectionism. The parties of the ruling class are advancing these policies now because the dominance of US corporations is being threatened by the entry of Chinese capitalism into advanced manufacturing and technology. 

Protectionism’s purpose is to protect national manufacturing, particularly in key areas related to arms, energy, and technology while boosting profits for the ruling class—it’s not about increasing wages or creating jobs for US workers. 

Not only is “America First” a dead end for the labor movement, but it also creates dangerous divisions among workers. Only international solidarity against all the bosses and all forms of exploitation offers a real way forward for working-class people.

How Protectionism Works

Corporations and national governments use protectionism in an attempt to reduce imported trade with foreign countries. Protectionism mostly takes the form of tariffs and duties charged on trade imports, which are taxes corporations pay if they want to sell imported goods in the US. Other protectionist trade barriers can include quotas that restrict foreign companies from competing in domestic markets by capping how much of a good companies or countries can import. 

Tariffs are designed to make imported goods more expensive to ship. But, because US importers still need to make a profit for their executives and shareholders, they pass any increased shipping costs onto workers in the form of higher prices or by finding ways to cut costs through automation or layoffs.

In the past, capitalists used the government to pass protectionist policies to prop up domestic manufacturing and to punish US companies that moved manufacturing outside the US (but still wanted to ship goods back to the US). These protectionist policies allowed US manufacturers to sell goods in the US without foreign competition, develop new production for the first time, or buy time to retool existing manufacturing. Today, however, sections of the capitalist class hate many of these measures; instead, protectionist measures are driven by the needs of US imperialism in this new era rather than short-term profits for corporations. 

Protectionism Is Inflationary 

Any foreign rival to the US that has to pay increased tariffs will likely retaliate by raising tariffs on US imports or cutting labor costs. This retaliation will damage sectors of US industry that depend on selling to the world market. In turn, the increased price of goods that result from higher tariffs could reduce the ability of US workers to buy other goods, provoking a crisis in other sections of the economy. In addition, any domestic manufacturer needing to purchase inputs for their manufacturing could see their production costs increase if tariffs affect those inputs. 

All this could mean transferring unemployment from one industry to another. Protectionism also allows domestic manufacturers to sell their goods at a higher price, potentially making those corporations more profitable. This development and any resulting trade war could create inflationary economic conditions in the short term, and depression in the long term by reducing markets for growth with workers expected to pay these costs with more unemployment and higher prices.

That’s why protectionism is inflationary; therefore it’s contradictory for any politician to say they want more protectionism while also promising to lower consumer prices, which many of them do.

Importantly, these trade wars, tariffs, and inflationary measures promise to hurt the economies of both US and Chinese imperialism rather than resulting in a clear winner. 

Workers Lose Either Way

Protectionism doesn’t change the basic fact of capitalism: profits are the unpaid labor of workers. The bosses are always going to be incentivized to keep more of this unpaid labor for themselves unless workers organize around a fighting approach to take back the wealth that we create. Slapping some tariffs on imports does not change how capitalism works. 

Instead, economic nationalism only blurs class distinction between workers and bosses by promising fake national unity. It creates an illusion that workers should find common cause with their bosses when in reality we have more in common with other working people around the world than we do with our boss at home.

Workers can’t improve their conditions without class struggle, and class struggle is impossible without building solidarity. The bosses know this, which is why they rely on keeping workers divided around immigration, race, and gender. Nationalism plays a similar role, which is why international solidarity against all bosses is the only real way forward for working people.

Neoliberal Trade Policies

Protectionism and policies to reduce trade between countries represent a sea-change from the “free trade” era of previous decades. US politicians used to encourage more trade between countries by lowering tariffs and reducing other barriers. That was because of a decades-long global division of labor in which China focused on manufacturing and the US was primarily the buyer. This division of labor has now changed, with China threatening to overtake the US as a leading global economic and military force with its own global trade deals and military pacts. 

After the fall of the Soviet Union, the US was the undisputed leading economy in the world, and therefore was in a strong position to dictate trade terms to other economically weaker countries through international institutions like the IMF and WTO. This same logic is what led the US ruling class and its politicians to make “free trade” deals like NAFTA that lowered the trade barriers between the US, Canada, and Mexico, and contributed to deindustrialization in the US. 

Using these free trade policies, capitalism took advantage of new markets across Russia, Eastern Europe, and Central Asia. As the Soviet Union—the main alternative to capitalism—collapsed, China accelerated its own capitalist restoration, which was then already underway. 

It was the expansion of capitalist markets across the globe, facilitated mostly by free trade deals, that drove down wages and living conditions for workers everywhere. Working people’s reduced living conditions, however, are not the primary driver behind the US ruling class’s reversal on free trade and protectionism, even though Trump has cynically used this reasoning to strike a chord with suffering workers. To be clear, the “end of neoliberalism” isn’t about stopping attacks on workers. Protectionism is about protecting the profits of US corporations from rising competition from China.

Trade Wars Reflect Inter-Imperialist Rivalries 

Chinese capitalism has outgrown its own national borders and is now in a position that competes with US capitalism for new global markets. Previous US-dictated “free trade” policies were supposed to keep China as a junior partner, but now that China is directly competing with the US as a rival in the imperialist power struggle, the US ruling class wants to change its own decades-old rules. 

The very fact that the US ruling class even has to use protectionism today shows how much US imperialism has weakened. And of course with any imperialist rivalry between countries, it won’t just be limited to a trade war with a tit-for-tat tariff increase. 

If taken to its logical conclusion, any imperialist conflict can escalate to an actual hot military war. US and Chinese capitalism’s drive to carve the world into rival economic camps is already defining the war in the Ukraine, shaping the escalating crisis in the Middle East, and pointing towards direct military conflict between the two main powers over Taiwan and the South China Sea. 

Union Leaders Shouldn’t Be Cheerleaders For Protectionism

US workers and workers everywhere can’t afford an economic nationalism that brings about inflation and imperialist war. However, our labor leadership is failing to put forward an alternative and is instead pandering to this same economic nationalism. 

When Teamsters president Sean O’Brien spoke at the RNC, he ended up adding fuel to the same divide-and-rule strategy that the bosses use in the workplace to drive down wages and working conditions for all workers. 

Only when workers are unorganized can the bosses pit workers against each other. Instead, union leaders should put forward an alternative by demanding a program that would include a closed union shop for all workers so that the bosses have to hire all workers at the same higher union wage. 

Just last month, dockworkers with the International Longshore Association union went on strike and successfully won an agreement to raise their wages by 62%. During the strike, both Trump and Harris blamed foreign shipping companies for the grievances that striking workers raised. For both politicians, this claim was a clever way to support workers while also advancing a protectionist agenda that boosts the profits of US bosses.

By ramping up economic nationalism, it allowed Trump and Harris to avoid commenting on one of the strikers’ key demands: ending increased automation, which is actually coming from the US companies that run the docks.

Who Should Own US Steel?

Recently, the United Steelworkers (USW) union helped block a Japanese company from buying US Steel. It’s of course correct for unions to protect the jobs of their members, and it is likely that any company that ends up buying US Steel will want to break it up in a hundred pieces, sell off what it can, close factories, and cut jobs. However, the Japanese company wasn’t preparing to make these moves because the company is Japanese; it was preparing to do so because the company is capitalist and is driven by the profit motive. 

It’s very likely that US Steel is facing bankruptcy and needs to be bailed out. The USW should first demand that US Steel “open the books” to expose how the company’s CEO prioritized enriching its wealthy shareholders over improving its production of steel. Any company that buys US Steel isn’t going to be able to save good union jobs. Instead, the USW should demand that US Steel be brought into public ownership, under the democratic control of the workers, so that its future won’t be dictated by shareholders’ profit motive. 

When the labor movement talks aboutnationalization, we shouldn’t mean taxpayers bailing out mismanaged companies only to hand them back to private owners, with the workers having no say in the matter. Rather, we should mean workers running the industry democratically. 

We could then plan production in a way that advances the interests of society, making the most efficient use of resources, and protecting the health and safety of the workers, the community, and the environment in general. For the steel industry, that change will mean retooling the industry to find a more sustainable way to produce building materials that doesn’t contribute to climate change. Good, safe jobs in steel can only be preserved on the basis of democratic, public ownership.

Instead of union leaders using the same economic nationalism that shields the US bosses from any blame, unions need to be demanding public ownership of US Steel and the docks to better guarantee the livelihoods of workers. Any labor leader who blurs the class distinctions between workers and boss betrays the very purpose of unions which is to defend workers from the avarice of the boss and advance the interest of the workers. 

International Solidarity Offers A Way Forward

When politicians say things like “looking out for America first,” they mean “looking out for the profits of American corporations.” Similarly, in the past, when they talked about free trade, they really meant freedom for US corporations to ship jobs overseas while paying millions to executives by price-gouging customers. Workers’ strength is in solidarity with one another, not with the boss. 

Workers who can struggle together across national divides can better win gains for their respective workplaces by not allowing their bosses to shift the blame to another group of workers somewhere else. Unions need to abandon economic nationalism for real labor solidarity, and any labor leaders who pander to economic nationalism need to be replaced by genuine class fighters who fight the bosses and not other workers.