Editorial – Why tariffs are not an issue

‘Tariff Reform, Free Trade or No Trade? The Fiscal Fraud Exposed’ was the front-page headline of the Socialist Standard in May 1910. It could be today too.

Britain was then a free-trade country with no tariffs on imports. This was the traditional policy of the Liberal Party, then in office, dating from the repeal of the Corn Laws in 1844 which had taxed imports of wheat and other cereals, resulting in higher rents for landowners and so lower profits for capitalists. By the turn of the century, however, British metal manufacturers were feeling the effect of competition from German and American producers and the cry went up for their profits to be ‘protected’. A demand taken up by the Conservative Party as ‘tariff reform’.

Both sides canvassed working-class support for their policy, employing the same specious arguments which we are hearing again today. The Free-Traders’ main argument was ‘cheap food’, that if tariffs were imposed then the price of food would go up and people would be worse off. Today, Trump’s opponents are saying that his tariffs will harm workers by putting up the price of computers, smartphones and clothes. The Tariff Reformers argued that a tax on imports would help preserve jobs in heavy industry and reduce unemployment. Trump, in photo ops with hard-hatted car workers and coal miners standing behind him, is employing the same argument, one that has attractions for the workers concerned and is often supported by their trade unions.

An increase in the cost of living and job security are matters that workers have to worry about. But tariff-free trade does not make workers better off and protective tariffs cannot ensure job security.

Wages reflect the money cost of creating and maintaining a worker’s labour power and tend to go up and down in line with the price of the basket of goods and services they need to do this. If the cost of living increases so, eventually, will money wages (the quicker, the more workers take union action to press for this). And vice versa.

Employers don’t employ workers to provide them with a job but to make a profit out of their work. They are always under competitive pressure to keep costs, including labour costs, down. One way of doing this is to install more up-to-date machinery that enables a worker to produce more in a given period of time. Which results in fewer workers being employed. This process continues even behind tariff walls.

Whether or not there are taxes on imports, workers remain economically dependent on those who monopolise the means of wealth production and have to work for them for a wage that is less than the value of what they produce or provide. Their interest lies in ending this situation by making the means for providing what society needs common property under democratic control.

Then there will be ‘no trade’ because what is trade but the exchange of products between separate owners? With common ownership it cannot exist. What there will be is the simple moving of products from where they are produced to where they are needed, a question of logistics and not a question of buying and selling — or of tariffs and other taxes.

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