What Are the Arguments for and Against Open Markets and Free-Trade Policies?
These are the essence of high tariffs and subsidies for the domestic firms. From this argument, one can deduce that the US, which has an expensive steel industry, may not compete against the steel industry of Brazil, which is relative cheap. In such situations, the US steel industry may lay off workers in order to cut costs and remain competitive. Consequently, workers who depend on the industry will slip into poverty. From such competition, the steel industry in the US may collapse altogether after several years. Consequently, the US will rely on foreign suppliers of steel. If the US engages in diplomatic disputes or wars with Brazil or other countries with steel firms, it may not be able to get that vital resource for its domestic operation. Thus, the result could be devastating to the US economy.
However, to compete successfully in the international market, these industries should provide high quality products and services (Blaine, 2007, p.78).
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MacLean, M. R. (2006). EU trade barrier regulation: tackling unfair foreign trade Practices. UK: Sweet & Maxwell.
Mitchell, A. (1995). Trade barriers: protestations and performance. UK: Land & Liberty Press.
Yeats, A. J. (1997). Did domestic policies marginalize Africa in international trade? Directions in development. World Bank Publications.