The protectionism policies created in U.S during the past months for domestic products are a game changer for international trade. The U.S is now leading protectionist policies by stating, “America first! Buy American and Build American.”

But, how did the U.S. got into this policies? President Donald Trump offered this protectionist policies during his campaign by merging protectionism with nationalism. So far, POTUS wants to renegotiate NAFTA because of a huge trade deficit specifically from Mexico. According to Donald Trump, not only Mexico but also China are taking jobs away from the U.S by offshoring manufacturing plants. Plants that before were creating jobs within the US borders. He now wants to impose tariffs and lay heavy taxes for U.S companies that manufacture abroad the U.S and sell back to the U.S.

The cornerstone reason of why companies fled away are the innumerable regulations and increasing taxing rates the Obama administration laid on American companies. The result was companies producing goods and services abroad searching for cheaper labor and less regulations.

POTUS wants to improve the U.S competitiveness by implementing policies such as for every regulation created two old ones need to be taken off, moreover, potentially decreasing corporate tax by a decent amount to lower corporate operating costs. This doesn’t change the populist idea of bringing back manufacturing jobs to America. When in fact it is merely a result of globalization and automatization within different industries. If the companies were force to produce back in the U.S; consumers will be the ones paying more for the same good or service that was being produced outside before.

Globalization is an inevitable effect in a capitalist economy such as the American market. This is the basic concept of globalization, when resources from a country abroad are cheaper to use and import in contrast to domestic resources. Automatization is also an inevitable effect in the U.S as a result of constant technology improvement and innovation. The job of what fifty people could do twenty years ago is now been done by five people and one robot.

Furthermore, jobs are being seen often as a benefit for the economy entirely because of often used populist ideals. Creating more jobs for a government could be ease. You could have people dig holes all day and put them back in. The lower the jobs needed to produce a good or a service the more efficient the production is because it means the process is getting closer to the maximum efficiency.

Let’s hope for a free market American economy like the old times in the near future without any protectionist measurements. America needs to improve the competitiveness inside the U.S by passing bills for lowering regulations and taxes. By doing so, companies will lower cost and gain competitiveness in a fair market. Let’s don’t fall into protectionism policies such as tariffs and quotas that go against the free markets ideals of a conservative or classical liberal.

Javier Perez Saavedra

 

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