BRICS & Outsourcing

Millions of lost jobs, $1 trillion trade deficit, vanishing industries. Now we face threat from the BRICS bloc (Brazil, Russia, India, China, South Africa) trying to ruin our economy by ending the dollar as currency reserve. Here is a plan addressing our economic vulnerability. 

The BRICS Threat. BRICS is a grave threat little known to many.  If the dollar ceases to be currency reserve, our economy would collapse like a popped balloon:  the dollar would crash and we would face massive inflation and soaring borrowing costs funding our reckless $34 trillion debt (and growing). BRICS is an existential threat seeking our economic ruin. We need urgent action: a united effort by our trade partners – the European Union, Canada, Mexico, Australia, South Korea, Japan – to strengthen our economic ties and block efforts by our main adversary, China, so that China fails in its attempt to destabilize our economies… and democracy itself.

Below are nine important proposals to strengthen our economic future and overcome outsourcing.

1. Level the playing field. Penalize abusive foreign labor practices. Require countries to raise salaries and labor benefits in return for the privilege of selling products in our country and most favorable trade status.

2. Official Trade Policy.  If you treat workers miserably, we will not buy your products. It’s ethical. It’s good trade policy. Ethics matter! 

3. Punish Trade Cheating. Require violating countries (and complicit American corporations) to raise labor standards: a 5-10 year transition period with yearly incremental improvements. Offending countries must agree to a phase-in plan and reach full compliance over an agreed upon period.

4. InflationOne reason for recent inflation is that we rely on imports. It makes us vulnerable. It brings price increases as products are shipped in costly vessels at the whim of oceanic companies based in other countries, sailing up to 15,000-mile journeys. It brought port bottlenecks with dozens of ships waiting to dock and unload. It brought domestic transportation complexities fueling inflation. Were we not so dependent on imports, we may have avoided much of the inflation scourge. Let’s change that!

5. Low WagesA key motivation for outsourcing is low foreign labor costs - workers paid miserably and given minimal health or retirement benefits. Companies make lots of money participating in such abuse. The result was trade deficits and the ruinous loss of American industries. This must change. A smart mix of better trade agreements,  tax incentives, tariffs, and punitive fines will take us far.

6. Most Favored Status. In return for most favored trade status and access to American markets, countries must abide by predetermined standards else tariffs will be increased annually to such a point that a violating country’s heavily taxed products will be too expensive to sell in America. Following these steps over time will end huge trade deficits, pervasive outsourcing, job loss, and our supply chain being so vulnerable to foreign countries. It will take patience.

8.  Immigration Reform. Promote immigration reforms with sufficient work visas for industries in need of workers. Domestic companies hiring illegal workers (at shamefully low wages) is bad policy. It must end. Enforce labor laws balancing justice and fair wages for American workers. 

9. Polluting. Outsourcing also lowers costs because many countries are pathetically lenient about pollution. That’s cheating when it comes to free trade. Polluting water or sky is a shameful way to cut costs. Coal and other filth put in the air by China and others eventually ends up in American lungs from LA to New York. Trade agreements must include environment. It is a moral imperative.

Outsourcing and its legacy of vanished industries brought widespread anger… bitter politics… mounting menace from China. We need action. Free trade advocates and Wall Street may resist tariffs, but if we don’t stop unfair trade practices and labor abuse, we will never level the playing field. The dark path of decline is not acceptable... unless we want China to lead the economy of the future.