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Protectionist Trade Measures

May 13, 1987

Imposing trade barriers will end up hurting the U.S. economy overall. Almost daily we hear of the plight of those in industries facing foreign competition. We want to help them, and holding off the competition seems one way to do so. Tariff proponents are quick to cite the immediate advantages but are blind to the costs. And the costs, sad to say, outweigh the benefits.

Nobody is selling us the goods we import because they like green paper. They sell us goods because they are going to turn around and use the money to buy goods from the United States or make investments here. Tariffs aimed at curbing imports will end up putting Americans who produce exports out of work. Further, many estimates of the costs to consumers per job saved run from $50,000 to several hundred thousand dollars, depending on the industry.

Restricting trade will tempt the other countries to retaliate. U.S. workers in industries competitive on the world market will suffer. At the same time the sheltered domestic industries will have absolutely no incentive to modernize their facilities or make any other attempt to increase their competitiveness.

More hidden but no less real are the jobs that won't be created to produce exports. Workers in industries threatened by imports know who they are and are banding together to seek protection. Unfortunately, those who would get jobs producing the increased exports can't peer into the future, and consequently don't know of the future opportunities they will miss out on. The political process is tilted in favor of those who want to maintain the status quo.

The harsh protectionist measures in the 1920s and 1930s played a role in bringing on the Depression. The new rush to impose tariffs will again harm American workers in many industries, slow the rate of new job creation, and eliminate incentive for industry to become competitive, all at an exorbitant cost per job saved. We must avoid the mistakes of the past.

KENNETH ROSE

Sunnyvale

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