There are calls for U.S. to adopt protectionism as an economic policy. Protectionism involves the legislation and implementation of policies that will restrain trade between states through methods like imposition of tariffs on imported goods, restrictive quotas, and a variety of other government regulations intended to protect domestic producers of goods and services against foreign competition in the domestic market. Proponents of protectionism consider this very significant because our curr...
Read more …There are calls for U.S. to adopt protectionism as an economic policy. Protectionism involves the legislation and implementation of policies that will restrain trade between states through methods like imposition of tariffs on imported goods, restrictive quotas, and a variety of other government regulations intended to protect domestic producers of goods and services against foreign competition in the domestic market. Proponents of protectionism consider this very significant because our current Balance of Payments (BoP) position is horrifically against the U.S.
In order to reverse this, it has been suggested that one of the measures that can be taken is that the U.S. drop its membership in the World Trade Organization (WTO) and instead enter into bilateral agreements with the 200 nations that want pursue trade relations with it. The rule must be that he U.S. should establish trade relations with a state only if no trade imbalance exceeding 60-40 or less can be strictly observed.
For example, in the case of China, some products that are heavily subsidized by the Chinese government find their way to compete with “Made In America” products. The government subsidies create an unfair advantage for China-made products to the detriment of U.S. products. Protectionism, in effect, will save American jobs.
However, those who advise against protectionism argue that protecting domestic industries by imposing high tariffs on certain foreign good may save the jobs of workers in directly competing domestic companies but may prove detrimental to domestic companies who rely on foreign imports, that have been levied high tariffs, to manufacture their products/services.
