“You can make a fortune in the import business,” promised the ads in the pulp magazines of my teen years. While most of the fortunes were made by those selling their “blueprints for financial success,” there was a fascination and mysteriousness about goods from other parts of the world — and their low cost and potential for profit only added to the allure.
Made in Japan, a label that was sneered at post-World War II as representing shoddy workmanship, soon grew to represent high quality in automobiles, electronics, cameras, and a flood of other goods craved by an America in the throes of economic prosperity in the ’70s and ’80s.
Other countries quickly jumped on the bandwagon, cranking out everything from athletic shoes to textiles of every kind, washing machines and other appliances, you-name-it. Then Nixon pierced the wall that China had built to keep out the rest of the world, and the whirlwind was unleashed. With an almost limitless supply of labor willing to work for a pittance, a government hungry for the infusions of cash that trade could generate, leaders able to manipulate the monetary exchange rate in their favor, and megalithic multi-national corporations seeking the lowest possible cost for their manufactured goods, it was a perfect storm that catapulted China to prominence on the world trade stage and set the United States on the road to basically an outsourcing economy.
Now, it would be possible to go through one’s entire day eating, wearing, driving, and working entirely with goods that came from outside the United States.
It is somewhat ironic then, that the American public on the one hand embraces the flood of foreign products and the cost savings they allow, and on the other is taking an increasingly insular stance toward trade agreements and international affairs.
A recent nationwide USA Today/Gallup Poll found that 50 percent of respondents believe increased trade with other countries hurts U.S. workers and that the impact is greatest on U.S. companies. That compares to a similar poll five years ago in which respondents said it was mainly U.S. workers who were hurt, while U.S. companies were helped.
The U.S. Business and Industry Council, which represents small and medium-sized domestic manufacturers, has been among the critics of American trade policy. In light of the recently announced $700 billion-plus U.S. trade deficit, USBIC president Kevin Kearns asks, “Does anyone still need proof that the free trade policies pursued by the U.S. government for the past 12 years have taken us down the wrong path?”
The mushrooming deficits, he says, represent “a systematic looting of American factories, jobs, and assets by foreign rivals, with the full support of their governments. We desperately need an overhaul of U.S. trade policy before America’s core domestic manufacturing is gone for good, and with it the capacity to create wealth and to sustain a broad middle class.”
Curing trade’s ill is a tightrope, however. Perhaps no sector of American business is more dependent on overseas markets than agriculture, which has historically posted a positive trade balance. Building walls isn’t an answer. Achieving fair and equitable policies is the challenge.