The Departure of Industry in America

manufacture

The American economy was once a world superpower, fueled by its many successful manufacturing industries. Sadly, that base has been torn apart by years of poor policy and unfair “free trade” agreements. For much of America’s history, our government took seriously its Constitutional power to regulate commerce with foreign nations. Tariffs were the major source of income for the Federal government. Perhaps more importantly, they helped to protect America’s industries from foreign competition and allowed America to become the world’s most productive nation.

Unfortunately, in the 20th century protectionism began to take on a negative connotation in the United States, and the tariff was cast aside as a tool to regulate trade. But after years of lost American jobs and markets flooded with cheap foreign goods, many are calling for a reexamination of the practice. Several economists have advocated the reinstatement of tariffs on foreign imports.

The United States has rarely used tariffs in recent years, but when they have been implemented there is evidence they do deter imports. In January of 2005, the Commerce Department implemented tariffs to stop the dumping of bedroom furniture from China into the U.S. market. In 2004, before tariffs went into effect, China exported $1.2 billion worth of bedroom furniture to the United States. The figure with the tariffs in place soon sank to just $691 million.

But such narrow and sporadic implementation cannot be as effective as wider use and will not be enough to rebuild a strong American economy. As the tariff was only imposed on China, other nations have picked up the slack and have sent scores of cheap bedroom furniture into the U.S. instead. Vietnam’s exports rose from $151 million to $931 million during the same period. This is evidence not that tariffs do not work, but that the U.S. needs to use its power to implement them in a comprehensive way in order for them to be as effective as they once were.

The United States needs to protect its industries and use all the tools at its disposal to do so. The methods that once built America into the world’s most productive nation should not be neglected today.

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