America was founded on the policy of protection for American industries. The first bill of our new congress, after approval of the presidential seal of the United States, was a tariff on various imported items. Our founding fathers from George Washington to Abraham Lincoln and Theodore Roosevelt were all protectionists, and found no negative relationship between high tariffs and economic growth. For the United States, free trade equaled failure while protectionism equaled prosperity.
We see the same evidence today. The United States practices free trade with a protectionist China and we run a huge trade deficit with China. China’s annual economic growth hovers around 10% while America’s economic growth languishes between 3% and 4%. China can’t figure out what to do with its trillion dollars of reserves while the United States can’t figure out what to do with its nine trillion dollar debt.
America can’t continue to ignore the fact that our manufacturing base is deteriorating and good paying jobs are going overseas to relocate in cheap-labor markets. We may be able to buy some things cheaper as consumers, but as workers we are experiencing falling wages at the same time. With free trade, we can only hope that prices fall faster and farther than wages to get ahead. We should have policy that puts upward pressure on wages and stops putting American producers at a competitive disadvantage with foreign producers. That policy is protectionism. It’s worked for us before, and it can work for us again. Teddy Roosevelt said “I thank God I’m not a free trader.” I’m thankful I’m not one either.
Japanese consumers pay five times the world price for rice because of import restrictions protecting Japanese farmers. European consumers pay dearly for EC restrictions on food imports and heavy taxes for domestic farm subsidies. American consumers also suffer from the same cscs test double burden, paying six times the world price for sugar because of trade restrictions (to give but one example). The US Semiconductor Trade Pact, which pressured Japanese producers to cut back production of computer memory chips, caused an acute worldwide shortage of these widely used parts.