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trade justice
Tariffs Should Be a Scalpel, Not a Sledgehammer
While tariffs can be a tool for positive change, they need to be used alongside investments and strong environmental protections in our own country.
Jan 26, 2025
During the campaign and in the months since the election, President Donald Trump spoke about tariffs—a tax on imports—as a tool to achieve everything from “bringing back” manufacturing jobs to the Midwest to acquiring Greenland. A tariff policy that delivers good jobs and a better quality of life to working families is possible. But it must be thoughtful and work with other policies that prioritize innovation, public health, and sustainability. Under this administration’s current approach, working families risk paying more for goods we need every day while suffering higher levels of pollution.
Tariffs are a tool for compliance and can be effective in enforcing human rights, labor, and environmental protections around the world. For instance, tariffs can make it more expensive for American companies and consumers to purchase goods made in countries that choose to produce goods more cheaply than American competitors because they allow factories to dump their waste in local waterways. A pollution-linked tariff would either nudge factories in a foreign country to compete more fairly by following the same environmental rules or nudge American consumers to buy from American manufacturers who do follow those rules.
Unfettered free trade promoted by U.S. leaders for decades sent our jobs abroad, shed key industries vital to our economic security, and worsened the environment around the world. Carefully applied, tariffs are one way to help rectify these errors.
Recently, former President Joe Biden’s lead trade negotiator announced that her office would investigate Nicaragua’s human and labor rights abuses to determine if the U.S. can put a “Section 301” tariff on Nicaraguan goods. Section 301 of the Trade Act of 1974 lets the U.S. government impose tariffs for production practices and policies in other countries that make trade unfair. In her statement, former Ambassador Katherine Tai said that the Nicaraguan government undermines fair competition by repressing its people. To put it simply, because there is little respect for workers, human rights, and the rule of law, goods can be made more cheaply in Nicaragua than they would be made in countries that abide by high-road standards. While this is the first time Section 301 tariffs have been used in this way, these tariffs could be more widely deployed to address harmful or hostile production practices worldwide. For example, countries with highly toxic and pollution-intensive industries could also be targeted.
While tariffs can be a tool for positive change, they need to be used alongside investments and strong environmental protections in our own country. Together, this could position the U.S. as a leader in modern manufacturing. Additionally, as a significant purchaser of goods, our government can keep those billions circulating in our own economy.
Tariffs can raise the price of imported goods if the companies importing those goods pass the extra cost onto the consumer. Given that corporate profits and CEO compensation are at an all-time high, there is no reason to think importers would pass up an opportunity to increase their margins. So if U.S. producers do not increase output to compete more aggressively against imported products with marked-up prices, consumers will face higher prices. Heightened costs to consumers are more likely when the tariffs target a variety of goods from many countries. With so many working families already facing a cost of living crisis, we have to counter potential price increases by making new investments in manufacturing.
When tariffs encourage domestic production to meet a gap in demand, policies also need to ensure that U.S. manufacturers are held to high standards. Increased production at a facility that is leaking toxic waste into the local water supply will place the community around that factory in greater danger—and allowing a facility with a history of safety violations to increase operations places the workers there at risk. We don’t have to choose between a productive manufacturing sector, clean air and water, and good jobs. Tariffs need to be accompanied by strong commitments that our factories meet high environmental protection standards, worker safety, and other safeguards.
Unfettered free trade promoted by U.S. leaders for decades sent our jobs abroad, shed key industries vital to our economic security, and worsened the environment around the world. Carefully applied, tariffs are one way to help rectify these errors.
But as the Center for American Progress notes, President Trump’s deployment of tariffs as a cudgel—an arbitrarily imposed 10% tariff on Chinese imports and a 25% tariff on imports from Canada and Mexico—would undermine sincere efforts to reform global trade policy to work for working families and fenceline communities. It would instigate tit-for-tat actions from trade partners buying key American products. This kind of retaliation then reduces the market share for American businesses and jeopardizes the stability of our hard-won jobs. Our top three export destinations are Canada, Mexico, and China, the countries Trump targets. Plus, signals from the Trump administration that it will claw back investments in American factories and roll back environmental protections will place the cost of tariffs on the health and pocketbooks of families.
We stand to lose a lot if we build our tariff policy on bluster alone. What we stand to win could change the trajectory of rural America and our economy.
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Trinational Solidarity Can Protect Mexican Food Sovereignty From GM Corn
U.S. and Canadian civil society groups are supporting the successful efforts of the “Sin Maíz No Hay País” (“Without Corn There’s No Country”) campaign to protect cultural heritage and biodiversity.
Dec 17, 2023
This coming January 1 marks the 30th anniversary of the trade pact originally known as the North American Free Trade Agreement, or NAFTA, now called the U.S.-Mexico-Canada Agreement, or USMCA. It also marks the 30th anniversary of the historic Zapatista uprising in southern Mexico that denounced the pact over concerns about threats to Indigenous people and food security.
Three decades later, it’s clear the Zapatistas were right.
For Mexico, NAFTA meant abandoning food sovereignty in favor of imports of basic grains, causing an increase in inequality and migration. It meant abandoning the countryside and opening borders to trade, creating a vacuum that organized crime has filled.
Trinational civil society organizations warned 30 years ago that the free trade model could destroy age-old farming traditions. Today they are demanding that Mexico stand up to the pressure of the agribusiness oligopolies and stop what could be the final blow to Mexican food culture.
But, for a handful of transnational agribusiness corporations—such as Bimbo, Maseca, Monsanto, and Cargill—NAFTA has delivered huge profits.
La Jornada reports that, today, food shortages and dependence continue to worsen while imports of basic grains in Mexico are growing to unprecedented levels—accounting for more than half of consumption.
In 2020, the three North American governments renegotiated some aspects of NAFTA. But as La Jornada op-ed coordinator and columnist Luis Hernandez Navarro explained then, “in the agricultural area, the United States-Mexico-Canada Agreement is more of the same, but worse. It is a central instrument for oligopolies to strip control of farmers’ seeds from those who have developed and cared for them for thousands of years. It’s a key piece of the neoliberal order in the region.”
Thus, under the USMCA, Mexico now has to defend itself tooth and nail against plans of the United States, supported by Canada, to flood the country with genetically modified corn.
Last August, the United States filed a claim under the treaty’s dispute settlement framework over a February 13, 2023, Mexican government decree that prohibits the use of biotech corn in tortillas and dough and phases out its use in all products for human and animal consumption.
The U.S. government charges that Mexico’s anti-GM corn policy lacks sufficient scientific basis and undermines the market access that the country agreed to in the trade treaty.
This attack on Mexican sovereignty has reactivated the trinational solidarity of Mexican, American, and Canadian organizations—a transcontinental bond strengthened in the decades since NAFTA was negotiated behind the people’s backs.
U.S. and Canadian civil society groups are supporting the successful efforts of the “Sin Maíz No Hay País” (“Without Corn There’s No Country”) campaign to protect cultural heritage and biodiversity by preventing the planting of GM corn and the use of the herbicide glyphosate over potential risks to human health, the environment, and the country’s biocultural diversity. In one form of solidarity, they’ve submitted a series of statements to the trade dispute process.
As Karen Hansen-Kuhn of the U.S.-based Institute for Agriculture and Trade Policy puts it, “whether or not the dispute panel accepts these statements, the range of topics covered will enrich the public debate on how trade rules could limit or enable sustainable solutions that promote public health, human rights, and economic opportunities.”
The organizations’ statements emphasize the insufficient research on the safety of GM corn for human consumption and the risks of glyphosate. They also emphasize the contradiction between the U.S. claim against Mexico and other key provisions of the treaty, which the United States should not be treating as mere decorations.
For example, Article 32.5 of the USMCA states that the treaty does not prevent a party from adopting or maintaining a measure that it deems necessary to comply with its legal obligations to Indigenous peoples, as well as protections for biological diversity in the chapter on the environment.
The statements emphasize the cultural and environmental risks of GM corn’s proliferation in Mexico, considering the diversity of over 59 native corn varieties that Indigenous peoples have constantly labored to diversify and adapt. They explain that the Mexican policy does not discriminate against U.S. producers, and in fact, these producers are profiting from increased exports of non-GM corn to Mexico.
A support statement led by Rick Arnold of the Council of Canadians—a network of tens of thousands of members from coast to coast and supported by Common Frontiers, a broad network of Canadian organizations—critiques the cozy relationship between their own government and large agribusinesses.
“As Canada joins the U.S. in challenging Mexico to stop its planned phaseout of genetically modified corn for human consumption,” they write, “a too-close collaboration between federal government departments and the biotechnology industry has been exposed […] CropLife Canada was instrumental in Canada’s new decision to remove regulation from many coming gene-edited GMOs.”
Canadian organizations demand that their government support Mexico in its efforts to gradually eliminate the importation of GM corn, and are calling upon the USMCA dispute panel to rule in favor of protecting health, small farmers, and environmental well-being, as Mexico has done for several millennia.
Trinational civil society organizations warned 30 years ago that the free trade model could destroy age-old farming traditions. Today they are demanding that Mexico stand up to the pressure of the agribusiness oligopolies and stop what could be the final blow to Mexican food culture. Long live international solidarity.
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Biden Should Use the Americas Partnership for Economic Prosperity to Free the Hemisphere From ISDS
One of the most controversial aspects of the hyperglobalization era, investor-state dispute settlement elevates multinational corporations and foreign investors to equal status with national governments.
Jul 20, 2023
The president’s extended national Bidenomics tour touted the administration’s break with “neoliberal” policies and the resulting increase in wages, manufacturing jobs, and infrastructure investment. That fêete should extend through the month: On July 1, the United States also celebrated an important rollback of one of the most controversial aspects of the hyperglobalization era, the investor-state dispute settlement regime.
Investor-state dispute settlement, or ISDS, elevates multinational corporations and foreign investors to equal status with national governments, empowering them to skirt domestic courts and sue governments before panels of three corporate lawyers to enforce special privileges and rights included in trade and investment agreements. The lawyers can award corporations unlimited sums to be paid by a country’s taxpayers—including for the loss of expected future profits.
Foreign corporations need only convince the tribunals of lawyers that a country’s environmental law, judicial decision, or safety regulation violates their extraordinary investor rights. The tribunals’ decisions are not subject to appeal, and the amount awarded has no limit. After ISDS attacks on critical environmental, energy, health, and even racial justice policies, countries have either paid corporations hundreds of millions in taxpayer funds or rolled back public interest policies.
As a candidate, now-President Joe Biden committed to excluding ISDS from any commercial agreement he negotiated if elected. We urge President Biden to be more ambitious.
Shamefully, it was the U.S. government that was one of the world’s major pushers of ISDS, including by inserting it into the 1994 North American Free Trade Agreement (NAFTA) and then other free trade pacts.
Almost 30 years later, more than $859 million in compensation has been granted to corporations in NAFTA ISDS attacks on oil, gas, water, and timber policies; toxics bans; health and safety measures; and more. This does not include demanded compensation in pending claims, such as the Keystone XL case against the United States through which a Canadian corporation currently seeks $15 billion from U.S. taxpayers over the revocation of a permit to build an oil pipeline across North America.
As the record of outrageous ISDS rulings grew and as the United States faced investor challenges that infuriated members of Congress and state and local officials, more scrutiny was focused on the obscure process few originally even realized was embedded in a dozen U.S. trade pacts.
The fight came to a head during the Obama Administration, which was pushing for a massive expansion of ISDS through the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP). The two pacts would have empowered tens of thousands of new foreign investors to challenge U.S. policies and demand taxpayer compensation, while also enabling U.S. investors’ ISDS challenges against dozens of countries.
Opposition to ISDS was a major factor for the Obama Administration’s failure to garner a congressional majority for the TPP in the year after it was signed in 2015. The TTIP was sunk by ISDS opposition in Germany, which had been a major ISDS proponent until being faced with billions in claims in two cases filed by Swedish energy firm Vattenfall over improved coal-fired electric standards and phase-outs of nuclear power.
Associations of U.S. local and state government officials voiced their opposition to ISDS, including the U.S. National Conference of State Legislatures (NCSL), representing the mainly Republican-controlled U.S. state legislative bodies:
“NCSL will not support Bilateral Investment Treaties (BITs) or Free Trade Agreements (FTAs) with investment chapters that provide greater substantive or procedural rights to foreign companies than U.S. companies enjoy under the U.S. Constitution. Specifically, NCSL will not support any BIT or FTA that provides for investor/state dispute resolution.”
The 2018 renegotiation of NAFTA provided the opportunity to begin the U.S. extraction from ISDS liability. Eliminating ISDS has long been a priority demand of congressional Democrats lawmakers while then-U.S. Trade Representative Robert Lighthizer opposed ISDS for subsidizing the offshoring of U.S. manufacturing jobs and undermining national sovereignty.
The result was NAFTA’s ISDS was altogether phased out over three years between the U.S. and Canada and its scope and reach drastically reduced with Mexico, as part of the July 1, 2020 U.S.-Mexico-Canada Agreement (USMCA) that replaced NAFTA.
Much of the world has turned against the ISDS regime as attacks against domestic public interest policies mounted and econometric studies found no proof that countries’ exposing themselves to ISDS liability gained more foreign direct investment.
Numerous countries, starting with South Africa and now including Bolivia, the Czech Republic, Ecuador, India, Indonesia, and Poland terminated their ISDS-enforced agreements or otherwise reduced their ISDS liability. Brazil refused to enter into such agreements in the first instance.
In 2020, 23 E.U. countries adopted a multilateral treaty to terminate all ISDS treaties among them. And 11 of them, including Germany, France, the Netherlands, and other countries that had previously joined the United States in pushing ISDS worldwide, announced their exit from the ISDS-enforced Energy Charter Treaty (ECT) after ISDS attacks on green energy policies. As a matter of fact, last month the European Commission announced the E.U.’s coordinated exit from the ETC.
As a candidate, now-President Joe Biden committed to excluding ISDS from any commercial agreement he negotiated if elected. We urge President Biden to be more ambitious.
Soon, talks are expected to start for an Americas Partnership for Economic Prosperity (APEP), a forum Biden launched at the June 2022 Summit of the Americas. The United States should use the APEP process to partner with its neighbors to free the hemisphere of ISDS.
With U.S. leadership, APEP could provide the participating countries Barbados, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Mexico, Panama, Peru, Uruguay, and the United States a path to liberty from ISDS.
All but two of these countries (Barbados and Canada) have an agreement in force with the United States that includes ISDS. Plus, many have additional investment agreements with ISDS in effect between them. This thicket of deals exposes the countries to multimillion-dollar corporate attacks on public interest policies for a just energy transition and the creation of resilient public health systems that are in the interest of all people in the hemisphere. Recently elected leaders of APEP countries, such as Gabriel Boric in Chile and Gustavo Petro in Colombia, have also expressed opposition to ISDS.
A U.S.-led ISDS exit via APEP would be a true win-win. The U.S. acting in cooperation with its allies would achieve an outcome beneficial to all and strengthen its ties in the hemisphere in doing so. It would be extremely difficult for Biden officials to find a similar opportunity in any other trade negotiation.
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