01 / 04
Free Trade Empowers Women and Tariffs Hurt Them

Blog Post | Gender Equality

Free Trade Empowers Women and Tariffs Hurt Them

As globalized market competition made household appliances increasingly affordable, it reduced the burden of housework...

Woman with outstretched arms at a harbor holding a white work helmet

It is an underappreciated fact that women are hit particularly hard by the United States’ ever-increasing tariffs on imports and burgeoning trade war with China (and, possibly, other countries as well).

Recently another set of tariffs on imports took effect, raising prices on hundreds of goods especially important to women, including foodstuffs and appliances. It may sound trite—or worse—to associate these goods primarily with women. But economic history clearly shows that labor-saving appliances and ready-made food products save women time, thereby expanding their opportunities, and allowing them to improve their education and skills, pursue employment outside the home, and do other things they value.

Consider just one appliance that the administration’s tariffs have hit especially hard: the washing machine. Just a century ago, women would spend at least one full day of their already overburdened week soaking, stirring, boiling, wringing, hanging, deodorizing, starching and then folding and ironing their household laundry.

Today, the washing machine reduces the amount of weekly active work on laundry to around an hour. As University of Cambridge economist Ha-Joon Chang has noted, “Without the washing machine, the scale of change in the role of women in society and in family dynamics would not have been nearly as dramatic.” Yet the U.S. recently placed a 25 percent tariff on Samsung and LG washing machines from South Korea, and has tariffed the foreign steel and aluminum used in American-made washers. As a result, the price of these machines has already increased 17 percent.

The new tariffs will increase the cost of countless goods that have freed women’s time and dramatically improved gender equality, helping make two-earner households possible. Consumers will see heftier price-tags on vacuum cleaners, sewing machines, refrigerators, dishwashers, kitchen waste disposers, blenders, food processors, toaster ovens, microwaves, kitchen ranges and ovens, slow cookers, and virtually all other appliances. (The full list of products targeted by the latest tariffs is 194-pages-long.) The increase in cost will represent an abrupt change for the worse after global trade liberalization had previously lowered the cost of many those same goods over the past decades.

The tariffs will thus target and raise the cost of appliances that have been key to women’s empowerment historically. Thanks in part to the affordability of everyday kitchen appliances, cooking has changed from a necessary, labor-intensive task to a largely optional activity in the United States. Back in the days of churning butter and baking one’s own bread, food preparation consumed as much time as a full-time job. But by 2008, the average American spent around an hour on food preparation each day, and from the mid-1960s to 2008, women more than halved the amount of time spent on food preparation. Yet women still cook more than men in the United States, and so any increase in the cost of kitchen appliances is a tax on items that women use the most.

As globalized market competition made household appliances increasingly affordable, it reduced the burden of housework, enabling more women to participate in the labor force and obtain economic independence In 1900, the average American woman spent nearly 47 hours a week on housework; by 2011, that had fallen to just over 26 hours a week. While some of that change can be explained by more equitable divisions of household labor, women’s housework hours have decreased faster than men’s have increased. In other words, a lot of the credit for freeing women’s time is owed to labor-saving technologies—and ultimately, to the market-driven innovation and global competition that make time-saving devices available and inexpensive. That is one reason why, as an upcoming policy paper of mine argues, markets have improved the lives of women even more so than for men.

Of course, women are far from the tariffs’ only victims. Trade wars increase costs for all Americans, and the latest round of tariffs will likely slow down the entire U.S. economy’s growth this year by 0.1 percentage point. That means fewer jobs and lower salaries in addition to higher prices.

Still, women have a particularly strong claim to offense regarding current U.S. trade policies. The administration should immediately deescalate the trade war, and return to the free trade goals that the president espoused this summer. “No tariffs, no barriers, that’s the way it should be,” he opined at the time. Such a policy would indeed be far superior not only for economic growth and consumers’ wallets, but for the nation’s women.

A version of this first appeared in The Hill.

Blog Post | Trade

Africa Tries Free Trade

Liberal ideas are beginning to gain traction on the world's poorest continent.

Economic nationalism has plagued Africa since decolonization. In 2021, that is set to change.

On January 1, the long-awaited African Continental Free Trade Area (AfCFTA) came into effect. Aside from the economic benefits that the arrangement will bring to the continent, Africa’s newfound support for free trade and liberalization marks a clear rejection of the socialist ideology that has tormented African politics for decades.

As it stands, 36 of the 55 African Union (A.U.) nations, including the regional economic powerhouses of Nigeria, South Africa, and Egypt (which together make up a third of the continent’s economy), have ratified the free trade area. Another 18 nations have indicated their support by signing the trade agreement and are expected to become full members soon. So strong is the appetite for free trade in Africa that Eritrea—often dubbed “Africa’s Hermit Kingdom”—is the only nation on the continent that remains reluctant to support the agreement.

Eritrea may eventually reconsider. Within 5–10 years, the AfCFTA will ensure that 90 percent of tariffs on goods traded between member states will be abolished. Within 13 years, 97 percent of all tariffs will be removed. By 2035, the World Bank has predicted, this enormous liberalization effort will boost Africa’s gross domestic product by $450 billion, increase wages for both skilled and unskilled workers by 10 percent, and lift more than 30 million people out of extreme poverty, defined as living on less than $1.90 per day. According to the same estimates, by 2035, the AfCFTA will see more than 68 million people rise out of moderate poverty, defined as living on $1.90–$5.50 per day. The “countries with the highest initial poverty rates,” the World Bank says, will see the “biggest improvements.”

The likely economic benefits of the AfCFTA are impressive. These rapid gains are ultimately a consequence of diverging from the economic nationalism that has kept much of the continent impoverished.

Africa’s turbulent relationship with socialism began in the late 1950s and early 1960s, when a plethora of newly independent states rejected the capitalist model. Many of the new leaders viewed capitalism and colonialism as synonymous. “In rejecting the capitalist attitude of mind which colonialism brought into Africa,” Julius Nyerere, the first president of Tanzania, said in 1963, “we must reject also the capitalist methods which go with it.”

In 1957, Ghana became the first African nation to achieve independence. Its leader, Kwame Nkrumah, a self-proclaimed “Marxian socialist,” suggested that only a “socialist transformation would eradicate the colonial structure of Ghana’s economy.” Before long, Nkrumah was encouraging other African states to seek independence so that they, too, could pursue the “complete ownership of the economy by the state.”

Many African leaders followed Ghana’s example. Sékou Touré of Guinea pursued “Marxism in African clothes,” banning all commercial activities not approved by the government. In Tanzania, the new constitution established the nation as a “socialist state” and pledged to “prevent the accumulation of wealth.” Léopold Senghor, the first leader of Senegal, said that after independence, Senegal would be guided “by Marx and Engels.”

The infatuation with socialism among Africa’s intelligentsia has meant that much of the continent’s economy has been mangled by central planning. For decades, debilitating policies such as price and wage controls, expropriation of private property, and inefficient state-owned enterprises were ubiquitous. The dev-astating human and economic costs imposed by these policies have filled the pages of many books.

As Free Africa Foundation President George Ayittey notes, the continent’s continuous love affair with socialism led to nothing but “economic ruin, oppression, and dictatorship.” Thanks to Africa’s recent turn toward liberalism, this abusive relationship may finally be over.

To highlight just how drastically outlooks have changed on the continent, it is worth comparing the A.U. to its predecessor, the Organization of African Unity (OAU). The OAU was set up in 1963 by Nkrumah, Nyerere, and several other socialist leaders. Nkrumah believed that “a united socialist Africa is a necessary condition for the realization of the African personality.” The organization’s founding members argued that the continent could prosper only by uniting behind socialism, rejecting the capitalist system, and disconnecting from the global economy. The OAU therefore was guided by a philosophy of “African socialism.”

By contrast, the A.U. has just implemented the world’s largest free trade area. In 2018, when the AfCFTA was introduced, Rwandan President Paul Kagame, then the union’s chairperson, described himself as an avid free-trader and an ideological disciple of Lee Kuan Yew, the first prime minister of free-trading Singapore. Similarly, the A.U.’s current chairperson, South African President Cyril Ramaphosa, has proclaimed that free trade will “unleash Africa’s economic potential.”

While there’s little doubt that socialism will continue to haunt some parts of the continent, it’s clear that, with the AfCFTA supported by 54 of the 55 A.U. member states, liberal ideas are beginning to gain traction on the world’s poorest continent. As African countries begin to embrace free trade, we can expect tens, if not hundreds, of millions of Africans to rise out of poverty in the coming years.

This first appeared in Reason.

Blog Post | Trade

Heroes of Progress, Pt. 17: Malcom McLean

Introducing the man who developed the modern intermodal shipping container, Malcom McLean.

Today marks the 17th installment in a series of articles by HumanProgress.org titled, Heroes of Progress. This bi-weekly column provides a short introduction to heroes who have made an extraordinary contribution to the wellbeing of humanity. You can find the 16th part of this series here.

Our 17th Hero of Progress is Malcom McLean, an American truck driver and, later, businessman who developed the modern intermodal shipping container. McLean’s development of standardized shipping containers significantly reduced the cost of transporting cargo across the world. Lower shipping costs significantly boosted international trade which, in turn, helped to lift hundreds of millions of people out of poverty. McLean’s “containerization” remains a vital pillar of our interconnected global economy today.

Before McLean developed the standardized shipping container, nearly all the world’s cargo was transported in a diverse assortment of barrels, boxes, bags, crates and drums. A typical ship in the pre-container era contained as many as 200,000 individual pieces of cargo that were loaded onto the ship by hand. The time it took to load and unload the cargo often equaled the time that the ship needed to sail between ports. That inefficiency contributed to keeping the cost of shipping very high. This is where McLean enters our story.

Malcolm (later Malcom) McLean was born in November 1913 in Maxton, North Carolina. When he graduated from high school in 1935, his family lacked the necessary funds to send him to college. Instead he began working as a driver for his siblings’ trucking company.

In 1937, McLean made a routine delivery of cotton bales to a port in North Carolina for shipment to New Jersey. As McLean couldn’t leave until his cargo had been loaded onto the ship, he sat for hours watching dozens of dock hands load thousands of small packages onto the ship. McLean realized that the current loading process wasted enormous amounts of time and money, and he began to wonder if there could be a more productive alternative.

In 1952, McLean thought of loading entire trucks onboard a ship to be transported along the American Atlantic coast (i.e., from North Carolina to New York). Although this idea would dramatically reduce loading times, he soon realized that these “trailer ships” would not be very efficient due to the large amount of wasted cargo space.

Mclean modified his original design so that just the containers – and not the trucks’ chassis – were loaded onto the ship. He also developed a way for the containers to be stacked on top of one another. That was the origin of the modern-day shipping container.

In 1956, McLean secured a bank loan for $22 million. He used the money to buy two World War II tanker ships and convert them to carry his containers. Later that year, one of his two ships, the SS Ideal-X, was loaded with 58 containers and sailed from New Jersey to Houston, Texas. At the time, McLean’s shipping company offered transport prices that were 25 percent lower than those of his competitor as well as the ability to lock the containers in order to prevent cargo theft, which also appealed to many new customers.

By 1966, McLean launched his first transatlantic service and three years later, McLean had started a transpacific shipping line. As the advantages of McLean’s container system became clear, bigger ships, more sophisticated containers and larger cranes to load cargo were developed.

In 1969, McLean sold his first shipping company for $530 million ($3.8 billion in today’s money) and went on to start a string of other business ventures. Most notably, he purchased the shipping company United States Lines in 1978 and built a fleet of 4,400 container ships. McLean continued to refine his shipping containers for the rest of his life. He died at the age of 87 in Manhattan in 2001. When he died, Forbes Magazine called McLean “one of the few men who changed the world.”

In 1956, hand-loading loose cargo onto a ship in a U.S. port cost $5.86 per ton ($65.50 in 2023 money). However, thanks to McLean’s new containers, the price reduced to just 16 cents per ton ($1.79 in 2023). HumanProgress’ Board Member Matt Ridley has noted that “the development of containerization in the 1950s made the loading and unloading of ships roughly twenty-times as fast and thereby dramatically lowered the cost of trade.”

This dramatic reduction in shipping costs boosted international trade. That means that consumers now have access to goods from around the world at a price lower than was previously thought possible. Similarly, reduced shipping costs have helped to boost the living standards of hundreds of millions of people in export-oriented developing countries over the last few decades.

Without McLean’s containers, global trade would be far below the level that it is today, and nearly all of us would be less well-off. It is for these reasons that Malcom McLean is our 17th Hero of Progress.

Video | Trade & Manufacturing

Dead Wrong: Is Trade War?

Trade is war, all against all, dog eat dog. Just look at the size of the trade deficit. Or look at the iPhone. Even that is made in China. They’re killing us on trade. Dead wrong.