Our nation’s 45th president is dead set on a trade war. He has increased tariffs on goods produced in China, and he has now indicated that he will increase tariffs on goods produced in Mexico.
While the president will say that this is a tax on the countries he is imposing tariffs on, the fact is that it is a tax on people who buy goods produced in China or Mexico. Products manufactured in China include electronics and electronic components, televisions, washing machine and refrigerators, and more.
We will pay
With a 25 percent tariff, a $300 dishwasher will now cost $375. The duty won’t take effect today or tomorrow, but within a few months, U.S. sellers will have no choice but to pass the cost along to consumers.
The tariff on Mexico will mostly hit agriculture. The president says he will impose a five percent tariff effective next week and will increase by another five percent monthly. It will primarily affect agricultural products like avocados and tomatoes, but folks who enjoy a Mexican beer or two will find those beers more expensive.
Here’s the rub
Mexico exports more than $250 billion in goods to us. We also export at least $20 billion to them. Farmers who send soybeans and corn to Mexico are vulnerable if Mexico decides to retaliate by imposing tariffs of their own.
No. 45 says he is imposing the tariff on Mexican-produced goods because of border immigration. The tariffs, No. 45 states, will be lower if Mexico can stop border immigration.
But the tactic of increasing tariffs will have a negative effect on the Mexican economy, exacerbating, instead of abating, border immigration. And it will hit every consumer in her pocket. Because so many U.S. auto companies have cars assembled in Mexico, at the maximum tariff, the average car will cost at least $1,000 more. And what about the grocery basket?
Tariffs are used to direct consumers away from foreign manufacturers and toward national ones. Theoretically, if a Mexico-produced avocado costs $2 with a tariff (maybe up from $1.50 without, numbers all theoretical), and a California-produced avocado costs $1.75, a cost-conscious consumer, given the tax, might choose the California avocado over the Mexican one. But if California can’t produce enough avocados to meet demand, folks will pay more with the tariff.
It’s a tax on consumers. Will people be as willing to take the hit with a $1,000 tax on an automobile? Possibly not. People may delay purchases instead of seeking out domestic automakers. In any case, it’s a hit on the U.S. economy.
Because African Americans earn less (with a median family income under $40,000, compared to $60,000-plus for Whites), we are more likely to be the consumer affected. Consumer taxes are regressive taxes, taxes that hit the folks at the bottom hardest.
Our voices need to be raised around the tax on Chinese produced goods as well as the tax on Mexican manufactured goods. In his fit of pique, however, No. 45 doesn’t get that he will hurt the consumers he vowed to protect, not the countries he is trying to punish.
Unfortunately, African American engagement in foreign policy has been peripheral. We’ve had folks like Secretaries of State Colin Powell and Condoleezza Rice take leadership on foreign policy, and folks like Mel Foote, of the Constituency for African, lead civil society organizations around foreign policy.
And we can go all the way back to Frederick Douglass’ ambassadorship to Haiti in the 19th century to illustrate our concern with foreign policy, even as we struggled in the aftermath of enslavement.
Still, when African Americans are polled, foreign policy issues are not our most important. They must and should be, and for several reasons.
First of all, we pay taxes for foreign aid. Secondly, people of color around the globe (including Mexico) are oppressed by U.S. foreign policy. Further, we fall short of our rhetoric about democracy and human rights when we offer financial support to countries that choose to marginalize some of its citizens.
African American people are uniquely situated to lift our voices around foreign policy hypocrisy. The late great political scientist Dr. Ron Walters talked about “foreign policy justice,” about the many ways we favored some nations, ignoring others, usually for strategic reasons.
We can’t tout democracy and then suppress it. Wait! We always have. We did it when veterans were lynched when they came back from World War I. We did it when we treated German prisoners of war better than returning veterans after World War II.
But we don’t have to cosign the hypocrisy now. If we, Black folks, believe in freedom, we must believe in foreign policy justice. And we must understand that foolish tariffs against Mexico will hurt us all.
Black voices need to be loud voices around foreign policy matters. Or we can be silent and accept the economic, moral, and political consequences of our nation’s biased myopia.