Reports: Trump DOL cuts more than $500 million in international labor projects.
What it means and why the Trump Administration's explanation doesn't make sense.
According to multiple reports, the Trump Administration has announced the termination of $500 million in financial assistance administered through the International Labor Affairs Bureau, or ILAB, the U.S. Department of Labor agency that enforces international labor agreements and attacks practices like child labor that can undercut the cost of American goods.
DOL ended 69 programs in all. From The Guardian:
John Clark, a Trump-appointed official, in the email justified the cuts by citing a “lack of alignment with agency priorities and national interest”. The department’s spokesperson, Courtney Parella, echoed this sentiment, telling the Post that the administration wants to prioritize “investments in the American workforce”.
I’ll come back to the rationale in a second, but to put this in broader context: this move comes a couple weeks after the announced termination of $30 million in ILAB awards that attacked foreign child labor and forced labor, among other practices. That move was announced by new Labor Secretary Lori Chavez-DeRemer and praised by DOGE, the White House’s Elon Musk-led cost-cutting unit, which has been unusually quiet at DOL.
For weeks, there have been rumors of tensions between Trump DOL leadership and DOGE about the scope and depth of cuts made—and not made—at DOL. Most of the rumors concerned personnel cuts. The ILAB awards ended a couple weeks ago were the first DOGE had claimed at DOL.1
Which to say: DOL was due, and ILAB, for a variety reasons, now looks like a prime target for additional cuts a couple weeks into Chavez-DeRemer’s tenure. ILAB also tracks things like goods made by child labor and assessments of the use of child labor. The cuts announced today will have a profound international impact. ILAB personnel cuts or any other cuts to the agency’s work also could fundamentally shift how work happens across the globe.
I’ll note that the Trump Administration’s explanation—we’re cutting these dollars to focus on American workers—is Not How Any of This Works. Under appropriations law, an agency can spend appropriated dollars only for the purpose set by Congress in giving the agency the money.
Based on the appropriation language below, extended through the continuing resolution passed by Congress a couple weeks ago, you can’t exactly pocket the money meant for Brazil yesterday and spend it on a welding program in Milwaukee tomorrow.
That $81,725,000 for the Bureau of International Labor Affairs shall be available for obligation through December 31, 2024: Provided further, That funds available to the Bureau of International Labor Affairs may be used to administer or operate international labor activities, bilateral and multilateral technical assistance, and microfinance programs, by or through contracts, grants, subgrants and other arrangements: Provided further, That not less than $30,175,000 shall be for programs to combat exploitative child labor internationally and not less than $30,175,000 shall be used to implement model programs that address worker rights issues through technical assistance in countries with which the United States has free trade agreements or trade preference programs . . . .
As I wrote a week ago, these cuts conflict with the stated Republican goal of fighting child labor. It also potentially creates vulnerabilities in the escalating tariffs situation, which included a newly announced 25 percent tariff on foreign-made cars.
Here is what Chavez-DeRemer said about child labor at her confirmation hearing last month:
[I]t's an important remit under the Department of Labor, as you know, to protect and not exploit all workers, but certainly child labor should not be accepted by anybody in America.
And here’s some of the background on ILAB awards I wrote a week ago.
[ILAB] helps enforce trade agreements and root out foreign labor practices that can undercut the competitiveness of American goods. To be so blunt that it risks sounding crass, a company’s labor costs are going to be different if they use actual slavery to produce goods instead of paying workers a decent wage and benefits. . . . If an employer makes more money doing good things for workers, they have less incentive to pay lower wages, cut benefits, and take other actions that can harm Americans’ personal economic health.
Maintaining the advantage of better-acting employers also can become more important, say, if you’re in a trade war over tariffs that drive up the cost abroad of American-made goods. . . . If you’re creating more opportunities for companies that use child labor to undercut in the marketplace the companies that don’t, I don’t think it’s unfair to say you’re helping to finance child labor. And just to put two and two together, if you’re not fighting child labor in countries near the United States, there’s a greater likelihood for more . . . stateside exploitation[.]
Stay tuned. I’ll have any additional updates as needed in tomorrow’s newsletter.
In the past few days, DOGE has altered its website in a way that makes it much harder to review and verify individual agency cuts to grants. I won’t go so far as to say this is intentional, but prior to the change, it had not posted the $30 million in ILAB grant cuts. As I wrote last week, it was unclear what projects DOGE had ended at DOL; I only identified two of the grants through context in social media posts and reviewing ILAB’s website.