America’s protectionism is failing

In economics, tariffs serve as a means of negotiation, protection, and progression. We know that when a country has a nascent industry, it protects it through tariffs so that it becomes competitive in terms of quality and cost, enabling it to compete with global firms. However, other nations also respond to this move by increasing the prices. For example, the US imposed tariffs on China, whereas China also retaliate increasing the price of goods and other inputs. America’s manufacturing industry has been facing a decline for the last two decades. The higher cost of production moved firms to other nations where they can find decent deals. When Trump started his presidency tenure he adopted the simple logic to revive the manufacturing sector, which is to raise tariffs, and if any country want no tariff they need to reshore (relocate production facilities to America). However, this policy is not as simple as it looks because other countries also have cards. The manufacturing sector is affected because the supply chains are complex, global, and dependent. When tariffs are imposed, they not only raise prices of imported goods but also make US-based products expensive because of the raw material. Job Losses in Manufacturing……