Reference no: EM132327916

Discussion: The Choice

Now that you have read "The Choice", watched the video, and read the textbook, you should have an opinion about free trade vs. protectionism. Mr. Roberts makes an excellent case for free trade. In fact, the US for most of its history pursued a protectionist policy toward trade; and yet became a very wealthy nation. So there must be some benefit to a protectionist policy. Our more recent past has pursued a policy more focused on free trade resulting in globalization (a loss of sovereignty and dependency on other nations, interconnectedness), and also resulting in exactly what Mr. Roberts said would happen: lower prices on almost everything but loss of industries and jobs (textiles, steel, etc.) requiring job retraining. This is history in a nutshell (but there is a lot more).

Consider this: Who knows what the Berry Amendment is? The Berry Amendment is the result of people recognizing the issues of globalization and free trade. It requires the Department of Defense to give preference in procurement to domestically produced, manufactured, or home-grown products, most notably food, clothing, fabrics, and specialty metals. Congress originally passed domestic source restrictions as part of the 1941 Fifth Supplemental DOD Appropriations Act in order to protect the domestic industrial base in the time of war. Because what would happen if there was a war and we had no steel production, no textile production, no medicine production (I could go on) in the US? In 2013, the US military began issuing athletic footwear to personnel. But could they find athletic footwear compliant with the Berry Amendment? No. Instead, they issued an allowance to personnel to purchase their own footwear. Hmmm...makes you think, right?

The US eliminated most quotas in 2008. Many countries said that they would pursue free trade, too. And yet, the US finds it difficult to export to certain countries, even when we have something they don't have due to their trade barriers (think "comparative advantage", right?). Our trade deficit is still very unbalanced. President Trump...oh, yes, I'm going there!...has stated that he wants trade to be more fair, that we have given and given (in the form of jobs to other countries--think textiles, steel, and more--just like in "The Choice"). We have embraced free trade and globalization while other nations haven't. Many people think that's not fair, that free trade only works when everyone participates in free trade. President Trump says that now it is time to raise tariffs, particularly against China. This is quite a change of policy! And retailers and industry organizations are going nuts! It isn't just that it will raise prices if it ever actually comes to fruition. If it raises prices enough, businesses that went overseas may find it less expensive to produce in the US (re-shoring). Already many companies have begun diversifying their sourcing matrix. We now have factories owned by Chinese companies being built in the US (even before President Trump said he wanted to increase tariffs on China).

This is a very emotional subject but we are going to try to be objective and think carefully. As you can tell, I currently have no opinion on this; your job is to convince me and your classmates what is best. I don't want prices to rise, but I want things to be fair. And unemployment is the lowest it's ever been. Currently, companies in the US are adding new kinds of benefits in order to get the best employees because the pool of available talent is so small. Remember that the price of apparel hasn't risen since the 1970's; in fact, it's cheaper than ever. I need you to convince me and your classmates what is best for the US. I truly believe that you could go either way on this issue and find plenty of support which is accurate. Remember, what's best for the US may or may not be best for the US consumer at this moment in time. When we think of the US, we must think of the whole nation and the future. If you are objective, unemotional, considerate, use facts, and build a case carefully, then no matter what your opinion is, you will do fine. No name-calling--pretend you are writing for the WSJ. But I want you to "be brief, be bright, be done".

Here's what to do:

Part 1: Just the Facts (maybe):

every student needs to find one excellent article which takes the side that this (some forms of protectionism) could be the best thing the US could do and offers support for their viewpoint.

While looking this up online, I found some articles with excellent information and not much opinion. If you find one of those, you are welcome to include it, too, as additional support.

Search words to use might be: US trade deficit with China, tariffs, US vs. China, retailers and tariffs...that should get you started.

Post the article in it's entirety with the link. Good resources might be WWD, WSJ, Sourcing Journal Online, and more.