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Protectionism harms the economy of the country that institutes it. Throughout history, when the government meddles with a nation's economy, the more it experiences debt and economic decline. This is because the nation's leaders attempt to artificially grow the economy. Contrary to what protectionist teach, imports are not bad for an economy. For example, show me a country open to free trade and I will show you a country that is prosperous. The free market works. Tweaking it in the name of nationalism or patriotism will only bring expected self-inflicted harm. An economy that provides an opportunity for individuals, will experience growth and prosperity unseen in places that shun free trade. Unfortunately, there are those who recognize and support trade protection. Protectionism concerns with the restriction of international trade by the government. This is seen frequently with the aim of protecting jobs, businesses, and major corporations from foreign competition. Those who advocate for protectionism argue that their policies protect and create jobs and encourage local competitive advantage. Protectionists use tariffs, subsidies, and other tools to enforce their agenda. One of the most common tools, a tariff, is a tax on imported goods. It was said by George Santayana, “Those who do not remember the past are condemned to repeat it.” If you take a look at US history, protectionism has been tried before and the results have not been so good. In 1890, the McKinley Tariff was imposed. The average duty on all import was raised from 38% to 49.5%. Following this tariff, consumer costs increased and over the next four years unemployment tripled and per capita GDP decreased more than 2%. The 1922 Fordney-McCumber Tariff caused farmers to lose more than $300 million, which is approximately $4 billion today. The 1930 Smoot-Hawley Tariff caused American imports and exports to reduce by more than half and within three years, US GDP declined by nearly 40%. Those are just three out of many examples of protectionism failing in US history. The Trump Administration has run on a protectionist platform ever since the President took office. The administration has chosen to focus on trade deficits as a measure of economic success, which is bad economics. The truth is, a trade deficit or a trade surplus does not reflect any measure of economic success or failure. Venezuela has one of the highest trade surpluses in the world, yet it's annual inflation rate hit 833,997 percent this year. From 2008 to 2009, US unemployment rate increased while the trade deficit decreased. From 2009 to 2014, the US trade deficit increased but the unemployment rate decreased. If protectionist were right about trade deficits, the exact opposite would have occurred.
Free trade is about opportunity for all. Protectionism is about showing favoritism. Home Depot co-founder, Ken Langone, noted, ”You don't elevate the poor by lowering the rich.” The founding fathers mentioned Britain's protectionism as a reason for declaring independence. Free trade fosters freedom, opportunity, and prosperity. Allowing the market to work freely encourages innovation and improvements in quality due to competition. If competition encourages better quality, why should American businesses be protected from it. Lower prices, more jobs, better quality: these are the benefits of a truly free market. Free trade is fair trade.