This administration has ... "a clear determination not to be the world's steel dump." (Trade spokesman William Brock outlining Reagan's protection policies for American steel industry, to an assembly of U.S. steel producers.)
"America should not become the 'dumping ground' for cheap steel subsidized by foreign governments." (An American steel producer comments about the "Fair Trade in Steel Act.")
The Internation Trade Commission (ITC) has often ruled that foreign competitors are "unfair" because they subsidize their products and are thus able to sell them at near or below cost to American consumers.
This may not always be true, but the irony here is that the American government is doing its best to force American consumers to pay more than necessary for thousands of products, including food.
The other side of this 'government vs. consumer' fiasco is that foreign governments would go to war before they'd allow American consumers to tax their citizens. However, this is exactly what happens when foreign governments tax their people, in order to send exchange goods to the U.S. at less than true market prices.
How disgusting it is to see the government of this country portray itself as a friend of the consumer, even establishing a "Consumer Protection Agency," while consistently working against the best interests of consumers in every area imaginable.
The popular argument given by the protectionists is that when a product is manufactured by a foreign producer, unemployment is created in this country because an American who could have produced the item did not.
For example, every time a Honda or Toyota is purchased instead of a Chevrolet or Ford, unemployment is increased in the American auto industry.
This, in a narrow sense, is undeniably true. However, the protectionist consistently overlooks the possibility that if another producer, who happens to reside on the other side of an imaginary line called a national border, can manufacture a superior automobile preferred by many consumers, perhaps the American producer is misreading market signals.
After all, consumers don't exist for the benefit of manufacturers - it's the other way around. The onus is on producers to satisfy those who would buy their products. When a producer petitions the government for "protection," this is an admission that the producer is inefficient in satisfying consumers, but wants to stay in business anyway, at consumer and taxpayer expense.
What if a foreign government subsidizes certain products to the detriment of American producers.
Granted, foreign subsidies cause contraction of certain American industries. This is not a negative thing when viewed in a larger sense. It is actually a wonderful opportunity for American consumers to buy things they need, cheaper.
American producers can and should re-employ and reinvest in other areas of the market where there is a need. American consumers will have the extra purchasing power in the new areas due to their savings gained from the foreign subsidies. If foreign governments are stupid enough to subsidize certain industries, that's their problem. We have every right to take advantage of the subsequent lower prices.
If the protectionists' argument is sound at the international level, it should be equally sound when applied between states in this country. After all, goods produced in California have the effect of taking jobs away from workers in Oregon.
And why stop here? Each county in California could bar trade with other counties, or at least impose heavy tariffs on goods "imported" from other counties. To carry this argument to its logical conclusion, cities, and even neighborhoods, could bar or tax the importation of "foreign" goods.
Of course, this is absurd, but it is a consistent application of the logic behind tariffs and other protectionist policies.
Picture the people of Mendocino and Humboldt Counties trying to figure a way to make food from redwood trees, while the people of Santa Clara and Sacramento counties try to build homes from processed corn.
This is where it all leads. The consumer is the loser and we are all consumers. Protectionism is yet another example of how governments have always been hostile to free traders, and their benefactors, those who use and consume traded goods. If we can't convince people in government to abandon their aggressive tactics against consumers, we will pay more and more for less and less.
Witness the well-being of consumers in the eastern bloc countries where free trading is almost totally suppressed, except in the black market/underground. It's obvious we have nothing to fear from free trade, but much to fear from government interference in trade.
There is no justification, moral, or practical, for anyone to restrict trade among free people. Fictional boundaries of nations have nothing to do with trade, other than destructive limitations on the widespread distribution of wealth and high standards of living.
If two individuals agree to trade goods or services, what right does a third party have to interfere?
More important than the preceding considerations, history tells us that many wars were caused by various restrictive trade policies among governments. Our own government is not without guilt in this. As the French philosopher Frederick Bastiat said, "When goods don't cross borders, armies will."