Question

In recent years, the US has lowered protective tariffs, arguing that lower tariffs encourage free trade and benefit consumers by decreasing the cost of imported goods. From the perspective of a US factory worker, what is the flaw in this argument?

a) When cheaper imported goods force out US-made goods, US factory workers often lose their jobs.
b) Free trade leads to cheaper imported goods because the cost of labor is less in many other nations.
c) Factory workers cannot afford to buy imported consumer goods even if they are cheaper than US-made goods.
d) Lower protective tariffs actually raise the prices of all goods whether they are made in the US or in foreign countries.

Answer 1

The main flaw from a US factory worker's perspective is that lower tariffs can lead to job losses due to cheaper imported goods outcompeting US-made goods, despite the fact that agreements like NAFTA did not lead to the significant job losses that some had predicted. The correct option is a) When cheaper imported goods force out US-made goods, US factory workers often lose their jobs.

Step-by-step explanation:

From the perspective of a US factory worker, the flaw in the argument that lower tariffs encourage free trade and benefit consumers is that when cheaper imported goods force out US-made goods, US factory workers often lose their jobs. The rapid expansion of international trade, including the enactment of agreements like the North American Free Trade Agreement (NAFTA), can indeed lead to job dislocations as employers may relocate to countries with lower wages, potentially leading to fewer jobs for US workers.

However, it's essential to note that the actual impact of such trade agreements can vary. In the case of NAFTA, for instance, the initial fears of significant job losses were not realized, as the United States experienced job growth and low unemployment following the agreement's implementation.