World trade is declining at a record pace
World trade is likely to fall this year by the largest amount since World War II, Cletus Coughlin writes in a short essay on the Federal Reserve Bank of St. Louis website. He cites a couple of obvious reasons — the global recession and the financial crunch, which has dried up credit for importers and exporters — and one not-so-obvious one, the globalized nature of the supply chain. Here’s his explanation:
With global supply chains, components and partially finished goods cross borders several times before a product is completed — increasing world trade. Thus, declining production will reduce trade even more in the current downturn than in previous downturns.
Coughlin barely mentions protectionist pressures that could cut trade even more. The Wall Street Journal, however, says that a pending decision on tire tariffs could be President Barack Obama’s “moment of truth” on trade issues.
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
The note about materials and components being shipped from one place to another is interesting. Not just for the stated reason, but for another: if materials are moving multiple times in their journey to market, then the cost of transportation is even more important to modern business.
Increased transportation costs (dependent almost entirely on energy costs) would therefore have a multiplicative effect on the true cost of the product, and could consequently have an inflationary effect far beyond what is currently recognized.
The democratic party platform calls for fair trade. This implies that imports will be cut. Tariffs are the main tool used to keep free traders from under cutting American producers. Labor likes this because they want better working conditions to include pay. We just can not compete with subsidized third world labor camps that pay as little as one dollar a day. Even if they paid ten dollars a day we would not be able to compete. If no tariffs or import restrictions are made all American labor will be out of work. So who gets to work Americans or foreigners? That is the question of course Republican free traitors want cheap foreign labor so that those that do not work can reap profits.