Donald
Trump is using his trade wars to support the part of the US capital
that has heavily lost from free trade globalization, which is more
powerful than ever in our days. This is also part of the Trump agenda
to persuade Americans for his "patriotic devotion" based on
his "America First" slogan.
The
reality is that the US empire was always conducting trade wars that
included not only tariffs on specific products, but even deliberately
created cartels.
In the
early 90s the Clinton administration uncritically adopted the
neoliberal doctrine from Ronald Reagan and continued the big fraud
against the majority of the Americans.
On the
one hand, the Clinton administration was selling the big fairy tale
of neoliberalism to the American public: free market capitalism would
bring prosperity for all through that trickle-down fiasco. And it was
translated, as always, in further cuts in public spending - more
tax-cuts for the super-rich. On the other hand, behind the scenes,
the same administration was implementing the most aggressive
protectionism in favor of some US corporations and against consumers.
In his
book Globalization and its discontents, Joseph Stiglitz
describes how the United States under Clinton administration set up a
cartel in favor of the US aluminum industry:
The
United States supports free trade, but all too often, when a poor
country does manage to find a commodity it can export to the United
States, domestic American protectionist interests are galvanized.
This mix of labor and business interests uses the many trade laws -
officially referred to as "fair trade laws," but known
outside the United States as "unfair fair trade laws"- to
construct barbed-wire barriers to imports.
These
laws allow a company that believes a foreign rival is selling a
product below cost to request that the government impose special
tariffs to protect it. Selling products below cost is called dumping,
and the duties are called dumping duties. Often, however, the U.S.
government determines costs on the basis of little evidence, and in
ways which make little sense. To most economists, the dumping duties
are simply naked protectionism. Why, they ask, would a rational firm
sell goods below cost?
During
my term in government, perhaps the most grievous instance of U.S.
special interests interfering in trade - and the reform process -
occurred in early 1994, just after the price of aluminum plummeted.
In response to the fall in price, U.S. aluminum producers accused
Russia of dumping aluminum.
Any
economic analysis of the situation showed clearly that Russia was not
dumping. Russia was simply selling aluminum at the international
price, which was lowered both because of a global slowdown in demand
occasioned by slower global growth and because of the cutback in
Russian aluminum use for military planes. Moreover, new soda can
designs used substantially less aluminum than before, and this also
led to a decline in the demand.
As I saw
the price of aluminum plummet, I knew the industry would soon be
appealing to the government for some form of relief, either new
subsidies or new protection from foreign competition. But even I was
surprised at the proposal made by the head of Alcoa, Paul O'Neill: a
global aluminum cartel.
Cartels
work by restricting output, thereby raising prices. O'Neill's
interest was no surprise to me; what did surprise me was the idea
that the U.S. government would not only condone a cartel but actually
play a pivotal role in setting one up. He also raised the specter of
using the antidumping laws if the cartel was not created. These laws
allow the United States to impose special duties on goods that arc
sold at below a "fair market value," and particularly when
they are sold below the cost of production.
I worked
hard to convince those in the National Economic Council that it would
be a mistake to support O'Neill's idea, and I made great progress.
But in a heated subcabinet meeting, a decision was made to support
the creation of an international cartel.
While I
had managed to convince almost everyone of the dangers of the cartel
solution, two voices dominated. The State Department, with its close
connections to the old-line state ministries, supported the
establishment of a cartel. The State Department prized order above
all else, and cartels do provide order. The old-line ministries, of
course, were never convinced that this movement to prices and markets
made sense in the first place, and the experience with aluminum
simply served to confirm their views.
Rubin,
at that time head of the National Economic Council, played a decisive
role, siding with State. At least for a while, the cartel did work.
Prices were raised. The protfits of Alcoa and other producers were
enhanced. The American consumers - and consumers throughout the world
- lost, and indeed, the basic principles of economics, which teach
the value of competitive markets, show that the losses to consumers
outweigh the gains to producers.
It was
the time where the Democrats had become Republicans and the US
bipartisan dictatorship was established for good to serve the
corporate America.
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