Disadvantages of Protectionism for the US Economy

Running Head: Protectionism in the US
Disadvantages of Protectionism for the US Economy
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Protectionism in the US 2
Disadvantages of Protectionism for the US Economy
Introduction
Protectionism is a situation where the government impose trade restrictions in order to
promote domestic production. Without protectionism, investors may decide to source products
from other nations selling at a lower price, and then make profit after selling in the domestic
economy; this is especially when the domestic prices are very high. This will hurt the domestic
producers since increased imports will raise competition and thus create a disincentive to
produce; thus a need for government trade restrictions. However, protectionism may bring
negative impacts to the economy. These negative impacts will be discussed in this paper. This
paper will also explain how the US manufacturing workers are losing. Finally, the paper shall
also make a proposition of what adaptations these manufacturing workers need to have in order
to cope with the evolving economy.
Analysis
According to Adams (2018), when a government imposes restrictions, the party that gets
hurt most are the consumers. The reason for this is because a decrease in imports translates to a
decrease in domestic supply, thus price level goes up since demand still remain unchanged.
Guarino (2018) noted that protectionism is not good for infant industries both in the short and the
long run. This is because, it creates a disincentive for development to the infant industries owing
to the reduced competition. These companies will have no incentive to gain some international
competitiveness and thus in the long term, they may lose if the government decided to withdraw
the protectionism. The worst impact is the declined quality of the produced goods; competition
improves the quality of output. It is not even clear for how long the government should protect
the infant industries because at some economic times when the domestic supply is so low that the
government may decide to remove protectionism so as to promote external supply.
Amadeo (2018) argued that the lack of competition in the US is responsible for rising job
outsourcing. Job outsourcing is responsible for raising the unemployment rate in the host
country. The existence of trade barriers leads to a decline in the market for products. It’s
estimated that elimination of trade barriers would result in the US income rising by $500 billion.
The US economic growth is slowed down by the increasing protectionism since the restriction of
trade leads to laying off of the many workers who are involved in the international trading
(Gallarotti, 2018). Furthermore, closing of US borders will result in other economies also closing