Trade

Looking at the globalization that the US promoted from 1946 to the fall of the Soviet Union in 1990, two major changes occurred. First the manufacturing jobs for millions of working people were out sourced to foreign countries mainly China and second these same workers were rewarded with cheap consumer products like electronics. It this swap the workers were shorted. A worker in the steel industry saw his wages cut in half as his benefits disappeared when the mills closed and in return he was rewarded with cheap TV’s and refrigerators. This process is now being reversed and the industrial jobs are coming back home in what is called reshoring. This will cause wages to rise and lead to inflation but the hope is that wage increases will stay ahead of the cost of living which was the case in the 1950’s, before the global world arrived. The idea of free and fair trade became free trade when China used government subsidies to lower the price of steel below production cost and flooded the world with cheap steel. This caused many steel companies to go out of business. The same thing happened in other industries such as textiles and appliances. The US is now demanding fair trade by adding tariffs to countries who have tariffs on US products. Case in point. For years Europe has charged 10% on US auto import while the US charged Europe only 2.5% on imports. This is now changed to 10% to be fair. This same process will apply to all countries who have unfair taxes on US imports.