And so the protectionists gather
We've not been shy about our support for a system of unilateral free trade. Others want to insist upon protecting British jobs and all that. They're wrong, of course, the steel industry being a useful example:
British jobs would be put at risk by government plans not to match the EU’s tough stance on dumped imports after Brexit, the steel industry has warned.
If, even if, some foreign government subsidises the production of steel then that cheap steel is a gift to us. For, we get cheap steel, which is excellent. But even then the protectionists go further in their demands:
At the root of the concern is the so-called “lesser duty rule”, which limits punitive tariffs on dumped products to the duty needed to redress the injury to domestic producers — rather than the subsidy enjoyed by the manufacturers. This is to prevent the system from being abused by protectionist interests.
Even when the duty levels are set at the damage done they're still complaining. Thus their complaint cannot really be about the damage done to their own interests, can it? It must be that they can see a method of raising tariffs further, to produce a positive benefit, not just the absence of the negative one.
But, of course, it gets worse. Steel is an intermediate good, an input into other processes. And we know what happens, from the American experience, when we try to raise that price:
200,000 Americans lost their jobs to higher steel prices during 2002.
These lost jobs represent approximately $4 billion in lost wages from
February to November 2002.3
• One out of four (50,000) of these job losses occurred in the metal
manufacturing, machinery and equipment and transportation equipment and
parts sectors.
• Job losses escalated steadily over 2002, peaking in November (at 202,000
jobs), and slightly declining to 197,000 jobs in December.4
• More American workers lost their jobs in 2002 to higher steel prices than
the total number employed by the U.S. steel industry itself (187,500
Americans were employed by U.S. steel producers in December 2002).
We really cannot see anything at all to recommend trade tariffs.