‘America First’ Protectionist Policies Could Endanger National Security

The current issue of Foreign Affairs features an essay by economic historian Douglas Irwin about “The False Promise of Protectionism.” But the magazine cover adopts a more ominous tone to promote Irwin’s piece: “Why Protectionism Is Dangerous.” The ploy worked: I flipped to that article first.

Irwin makes a convincing case for why protectionism is harmful economically. He draws on examples from history, including the infamous Smoot-Hawley tariffs that deepened the Great Depression and the less well-known import restrictions imposed in the 1980s, and demonstrates how those trade restrictions begat responses that ultimately hurt the very workers and consumers they were designed to help. He concludes that similarly “protectionist measures today would prove much more disruptive” in part because the World Trade Organization allows for such retaliation. But Irwin also shows that protectionism is damaging even when other countries don’t retaliate. Because “trade restrictions increase the price of imported goods,” which reduces “the amount of money [consumers] can spend on other goods.” This amounts to “a kind of regressive tax,” Irwin notes, because “low- and middle-income households benefit substantially more from trade than do high-income households.”

Irwin is certainly correct that the harms of trade protectionism far outweigh the temporary benefits that might accrue to the handful of workers in privileged industries briefly sheltered from the vicissitudes of competition. But there is another element of trade protectionism that also deserves attention, consistent with Foreign Affairs’ cover pitch: protectionism is dangerous because it increases the likelihood of conflict….

Source: ‘America First’ Protectionist Policies Could Endanger National Security | The National Interest Blog

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