Previously posted on SSRN.

Abstract

U.S. trade policy stands at an inflection point. The Biden administration’s “worker-centered” trade policy promised to empower foreign workers to improve employment and living standards globally, but it linked its trade assistance to political allies. The Trump administration’s “America First” trade policy promises to use tariffs and isolationism to protect and empower U.S. workers, but it is fostering antagonism rather than cooperation in trade. Both policies, while sharply diverging at the edges, recognize that U.S. trade policy affects employment opportunities in the United States. Both policies also critically overlook the relationship between the treatment of workers in trade partner countries, the associated labor and production costs, and protecting workers in the United States from absorbing the losses caused by unfair trade competition.

In this Article, I argue that the empowerment of foreign workers in trade sectors to earn higher wages and better working conditions is a misunderstood feature that should be a key pillar of U.S. trade policy. Drawing on an original empirical project in Mexico’s automotive sector under the United States-Mexico-Canada Agreement (USMCA), I demonstrate that even the Biden administration’s efforts to center trade policy on workers failed to empower them. Instead, it left workers vulnerable to abuse, U.S. companies motivated to offshore production, and foreign consumers unable to afford U.S. exports—residual deficiencies that harm workers in the United States and opened the door for the Trump administration’s tariff-centered and aggressive trade policy.

Uncovering the relationship between workers’ capacity in trade supply chains and job opportunities in the United States challenges conventional policy narratives around the role of U.S. trade agreements, foreign aid, and assistance. Simultaneously, the resilience of protectionism in trade rhetoric underscores the need to unearth such relationships and envision a radical reconceptualization of U.S. trade policy that benefits, or at least does not harm, the workers who make trade possible.

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