Discussion: The Choice You Have Read

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Our more recent past has pursued a policy more focused on free trade resulting in globalization (a loss of sovereignty and dependency on other nations, interconnectedness), and also resulting in exactly what Mr. Roberts said would happen: lower prices on almost everything but loss of industries and jobs (textiles, steel, etc.) requiring job retraining. This is history in a nutshell (but there is a lot more). Consider this: Who knows what the Berry Amendment is? The Berry Amendment is the result of people recognizing the issues of globalization and free trade.

It requires the Department of Defense to give preference in procurement to domestically produced, manufactured, or home-grown products, most notably food, clothing, fabrics, and specialty metals. Congress originally passed domestic source restrictions as part of the 1941 Fifth Supplemental DOD Appropriations Act in order to protect the domestic industrial base in the time of war. Because what would happen if there was a war and we had no steel production, no textile production, no medicine production (I could go on) in the US? In 2013, the US military began issuing athletic footwear to personnel. But could they find athletic footwear compliant with the Berry Amendment?

No. Instead, they issued an allowance to personnel to purchase their own footwear. Hmmm...makes you think, right? The US eliminated most quotas in 2008. Many countries said that they would pursue free trade, too. And yet, the US finds it difficult to export to certain countries, even when we have something they don't have due to their trade barriers (think "comparative advantage", right?). Our trade deficit is still very unbalanced. President Trump...oh, yes, I'm going there!...has stated that he wants trade to be more fair, that we have given and given (in the form of jobs to other countries--think textiles, steel, and more--just like in "The Choice"). We have embraced free trade and globalization while other nations haven't. Many people think that's not fair, that free trade only works when everyone participates in free trade.

President Trump says that now it is time to raise tariffs, particularly against China. This is quite a change of policy! And retailers and industry organizations are going nuts! It isn't just that it will raise prices if it ever actually comes to fruition. If it raises prices enough, businesses that went overseas may find it less expensive to produce in the US (re-shoring).

Already many companies have begun diversifying their sourcing matrix. We now have factories owned by Chinese companies being built in the US (even before President Trump said he wanted to increase tariffs on China). This is a very emotional subject but we are going to try to be objective and think carefully. As you can tell, I currently have no opinion on this; your job is to convince me and your classmates what is best. I don't want prices to rise, but I want things to be fair.

And unemployment is the lowest it's ever been. Currently, companies in the US are adding new kinds of benefits in order to get the best employees because the pool of available talent is so small. Remember that the price of apparel hasn't risen since the 1970's; in fact, it's cheaper than ever. I need you to convince me and your classmates what is best for the US. I truly believe that you could go either way on this issue and find plenty of support which is accurate.

Remember, what's best for the US may or may not be best for the US consumer at this moment in time. When we think of the US, we must think of the whole nation and the future. If you are objective, unemotional, considerate, use facts, and build a case carefully, then no matter what your opinion is, you will do fine. No name-calling--pretend you are writing for the WSJ. But I want you to "be brief, be bright, be done".

Paper For Above instruction

The debate between free trade and protectionism remains one of the most significant economic issues facing the United States today. While proponents of free trade emphasize lower prices, increased efficiency, and global economic integration, supporters of protectionism argue for safeguarding domestic industries, national security, and employment. This paper explores both perspectives, providing evidence and analysis to determine what policy approach aligns best with the long-term interest of the US.

Historically, the United States adopted protectionist policies in its early development stages, implementing tariffs and trade restrictions to foster domestic industry growth. Over time, the nation transitioned towards more open trade agreements, such as NAFTA and agreements within the World Trade Organization (WTO). Advocates of free trade, like economist Martin Feldstein, contend that reducing tariff barriers unleashes competition, lowers consumer prices, and promotes innovation (Feldstein, 2009). These benefits potentially lead to economic growth and increased living standards, as exemplified by the rapid rise of consumer goods affordability since the 1970s.

However, the costs of free trade become apparent when considering job erosion in sectors like textiles, steel, and manufacturing. The US has experienced significant industry declines due to outsourced production, leading to unemployment and regional economic decline. The Berry Amendment exemplifies a protectionist measure aimed at maintaining essential industries by requiring the Department of Defense to prioritize domestic sourcing for vital materials. This policy aims to preserve national security by ensuring the availability of critical supplies during wartime, illustrating the argument for protective measures.

The push for protectionism has gained momentum recently, especially under the Trump administration, which emphasized "fair trade" and reintroduced tariffs against China and other trade partners (Bown, 2020). The rationale is to correct perceived unfair trade practices, address trade deficits, and incentivize domestic re-shoring of manufacturing. While higher tariffs can make foreign imports more expensive, they also incentivize companies to bring production back home, potentially creating jobs and strengthening domestic industries. Yet, there are risks involved, including retaliatory tariffs, higher consumer prices, and disruptions to global supply chains (Evenett & Baldwin, 2020).

Furthermore, the ongoing debate incorporates considerations of national security and economic resilience. For instance, the challenges in procuring compliant athletic footwear through the Berry Amendment in 2013 highlight how protectionist policies, though sound in principle, can encounter practical obstacles. Moreover, the shift toward diversifying supply chains indicates that some companies are actively seeking to balance cost efficiencies with national interests, such as building factories owned by Chinese companies in the US. This suggests a pragmatic approach that seeks a middle ground—protecting critical industries while maintaining global trade relations.

Ultimately, determining the best course for the US involves recognizing both economic and strategic factors. While free trade offers consumers the benefit of lower prices and broader access to goods, it can undermine domestic industries and jobs. Conversely, protectionism can safeguard national security and employment but risks economic retaliation, higher prices, and reduced competitiveness.

Maintaining a balanced approach appears most prudent—leveraging free trade for consumer benefits and economic growth while implementing targeted protectionist measures to support vital industries and ensure national security. Policies like the Berry Amendment exemplify such targeted protectionism by safeguarding industries critical during wartime and beyond. As the US navigates this complex landscape, it must consider the implications of its trade policies for current prosperity and future resilience.

References

• Bown, C. P. (2020). Trade Policy and US-China Relations. Peterson Institute for International Economics.
• Evanett, S., & Baldwin, R. (2020). Global Supply Chains and the Future of Trade. VOXEU.
• Feldstein, M. (2009). The Benefits of Free Trade. The Journal of Economic Perspectives, 23(3), 21–36.
• Hufbauer, G. C., & Schott, J. J. (2005). US Trade Protectionism. Cato Journal, 5(2), 213-249.
• Irwin, D. A. (1996). Against the Tide: An Intellectual History of Free Trade. Princeton University Press.
• Oatley, T. (2019). International Political Economy. Routledge.
• Rodrik, D. (2018). Straight Talk on Trade. Princeton University Press.
• Stiglitz, J. (2002). Globalization and Its Discontents. W. W. Norton & Company.
• Yarbrough, B. V., & Yarbrough, R. M. (2007). Who Wins? The Outcomes of Trade Policy.
• World Trade Organization. (2022). Trade Policy Review. WTO Publications.