In an effort to give the steel industry a chance to consolidate and modernize, President Bush had impose a tariff on imported steel. The President recently announced that the tariff will be lifted. This decision resulted in a negative response from the steel industry who claims that they need protection from unfair foreign competition.
My question is: What about competitive advantage? In Principles we learned that everyone benefits when we each produce what we're good at. We would all get more of everything. High steel prices are reflected in the price of many consumer goods: cars, buildings, etc... Electrolux vacuums has even announced a change in this year's projections because of rising steel prices. Something as small as a screw at the hardware store will go up.
If the price of consumer goods is held at a lower level, doesn't everyone benefit?