The latest Newsweek features a debate about the merits of free trade. Columbia?s Jagdish Bhagwati offers a simple response to those who tout protectionist policies:
The problem with the opposing side is you think protecting steel will create jobs in the steel industry. But you are opening up a whole series of additional effects. One, of course, is that downstream industries typically become more uncompetitive. When President Bush put on steel tariffs, the effect was to price out a whole lot of steel-using industries, including autos. There was a famous study that about 200,000 jobs may have been lost.