Free Trade

AFL-CIO President Backs Trump's Tariffs, Calls for More Bailouts for Businesses Hurt by Them

It could cost $39 billion to cover the damage caused by Trump's trade war.

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MIKE SEGAR/REUTERS/Newscom

While weathering criticism from Republican lawmakers and traditionally Republican special interests over his anti-trade policies, President Donald Trump has one somewhat unlikely ally: the head of America's largest union.

Richard Trumka, president of the AFL-CIO, told Inside Trade his union and its members are "generally supportive" of the president's approach so far, including the prospect of additional tariffs on Chinese imports. "Sometimes what's good for the country may be bad for Joe or Jane in the short term," he said, "but in the long term if it's good for the country it's good for everyone."

Even if that were true, it might be a tough sell to Joe or Jane. But the consequences of the tariffs are more significant than Trumka suggests, sounding a lot like Trump administration officials who have likened reports of tariff-inflicted economic pain to "hiccups." Trumka seems to realize that. Otherwise he would not have told Inside Trade that the federal government should commit to subsidizing industries that stand to lose as a result of Trump's trade policy.

The White House has already outlined plans to spend $12 billion through a New Deal-era crop insurance program to subsidize the losses of farmers who may see lower prices for products such as soy beans because of the retaliatory tariffs China has imposed on American farm products. Covering all the losses—not just those affecting farms, but those affecting all industries, as Trumka suggests—could require as much as $39 billion, according to an analysis that the U.S. Chamber of Commerce published this week.

"Offering a bailout to any single industry is a slippery—and costly—slope," the report warns. "The best way to protect American industries from the damaging consequences of a trade war is to avoid entering into a trade war in the first place."

Trumka's some-pain-now-for-gain-later argument would carry more weight if Trump had clear, achievable goals. So far all Trump has to show for his trade war is a handshake deal with Europe promising not to escalate things farther. There are no planned negotiations with China, and Chinese officials recently told Politico they don't even know what Trump's goals are. The two sides are now getting farther apart, not closer, on trade. Canada is refusing to participate in this week's conference on the North American Free Trade Agreement, and talks with Mexico don't seem to be going well.

But at least Trump can claim he's following through on his promise to shake up Washington. How many other Republican presidents would have Richard Trumka applauding?