Analysis of Arguments For and Against U.S. Trade Protection

In this paper I will summarize the arguments for and against trade protection for United States industries. Among the measures that can be used to restrict foreign trade are tariffs and trade quotas. Industries can also get nontariff barriers, miscellaneous legislation which give domestic products an advantage. In general, experts agree that restricted foreign trade benefits workers and domestic businesses, while under free trade consumers have a greater quantity and quality of choices available to them. [1] I will also look at arguments for and against NAFTA, an important trade agreement between the countries of North America.

Tariffs are perhaps the most common way to restrict, or at least slightly discourage, foreign imports. Tariffs are, quite simply, taxes on imported goods. The thought behind imposing tariffs upon these goods is that it will cost more for foreign producers to sell their goods in the United States. However, the tariff is often passed down to the consumer. Even if the buyer can afford the cheaper American substitute for the product, the consumer is still robbed of fair choices between substitutes which throws off the fundamental forces of the market. Thus goes the anti-tariff argument. [2] Tariff-based protectionism does have its benefits, though. Due to fluctuations in currency prices, it is sometimes possible for foreign exporters to charge unnaturally low prices for their products. This is called dumping and will greatly reduce the sales of the domestic competitor. A tariff can be added to artificially raise the price of the foreign product. While this comes at the expense of consumers who wish to buy the cheapest products, it benefits American businesses and thus can indirectly benefit cons...

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...edcontent.com/article/1362775/tariffs_import_quotas_and_exchange.html?cat=3. Accessed 03/02/10

[3] Mike Moffatt. About.com: Economics. "Tariffs - The Economic Effect of Tariffs" http://economics.about.com/cs/taxpolicy/a/tariffs.htm. Accessed 03/02/10

[4] Mike Moffatt. About.com: Economics. "Why Are Tariffs Preferable to Quotas?" http://economics.about.com/cs/taxpolicy/a/tariffs_quotas.htm. Accessed 03/02/10

[5] Import Quotas. "http://www.albany.edu/~aj4575/LectureNotes/Lecture21.pdf. Accessed 03/02/10

[6] Turley Mings and Matthew Marlin, [The Study of Economics: Principles, Concepts & Applications] (Dushkin McGraw-Hill, 2000) 413-414.

[7] Walter R. Mears, "Clinton Broadens Argument for NAFTA". [McCook Daily Gazette] 27 Sept 1993. Google News Archive. http://news.google.com/newspapers?id=btogAAAAIBAJ&sjid=TWsFAAAAIBAJ&pg=1352%2C2596344. Accessed 03/03/10