Trade Protectionism

Protectionism and its Impacts

The issue of adequate trade protection - or the lack of it - has remained a significant point of debate for majority of Americans Drezner (2004 , for instance , points to the resurgence of protectionist sentiments among U .S . citizens in light of the outsourcing phenomenon wherein Americans feared lossing their jobs to offshore counterparts Scheve and Slaughter (2001 ) also note that there has been a general climate disillusionment in the U .S . with trade liberalization amid poor real and relative wage performance ' among less-skilled American workers who usually bore

the brunt of policies brought about by globalization

This is hardly surprising since trade protectionism has often been perceived as a buffer against stiff foreign competition (Stokes 7 ) The United States has maintained several major protectionist measures that includes restriction on the entry of steel , auto , and textile products to counter the adverse impacts of an increased integration of the American economy with the rest of the world . Although globalization has fueled economic growth in the United States , making it the world 's largest exporter and importer (Sevilla 4 ) it also caused the U .S manufacturing sector to shrink due to fierce competition (Sachs et al , 1 ) Sachs , et . al (1994 ) contend that the internationalization of the U .S . economy has brought about three alarming trends in the U .S labor market , in particular the sharp decline of over-all employment in the manufacturing industry ' the widening inequality between the incomes of high-skilled and low-skilled workforce and the sharp decline in employment in low-skill manufacturing sector (Sachs Schatz 2

Consequently , public pressure to increase trade buffers increased dramatically with the increase in the number of workers displaced by this situation . As Scheve and Slaughter (2001 ) points out , a consistent plurality or majority tend to weigh the costs more heavily than the benefits and thus oppose liberalization (Scheve Slaughter 13 ) Apparently for the American worker , the only way by which the United States can protect its companies and jobs is by increasing protective measures that would minimize or altogether block the heavy entry of foreign capital goods and products competing with domestic products in the U .S . market . Apart from employment , protection is deemed necessary for domestic-political income redistribution , maintaining a favourable balance of payments , international income redistribution , and for encouraging and supporting infant industries (Magee , Bergsten Krause 650

On the other hand , trade protectionism is not without its own economic and political costs . Feenstra (1992 ) warns against treating import quotas and other forms of trade restrictions as simple nondistortionary transfers to trading partners ' by demonstrating how costly protectionism can be when it sparks trade wars or encourages American trading partners to put up their own protectionist regions or beef up their protectionist stance .Stokes (2007 ) also point to the grave consequence of the implementation of the Smoot-Hawley Tariff Act of 1930 which raised U .S . tariffs to historically high levels ' and consequently decreasing global commercial activity due to retaliation from other countries . A more recent case in point against protectionism...