532532 Chapter 15 | Economic Policythe president’s position tout the value of free trade in increasing wealth, reducing
consumer prices, and promoting the efficient allocation of resources. About the only
group that is traditionally opposed to free trade is liberal Democrats with ties to
organized labor. In fact, in the 2016 presidential campaign Bernie Sanders and Donald
Trump sounded almost identical on the topic of trade.^3
While it may seem like tariffs on steel and aluminum will help those industries, the
overall impact of the trade barriers is almost certain to cost jobs. The U.S. steel industry
employs about 147,000 people, but manufacturers that need steel employ about 6.5 million
people each year and the construction industry employs 6.3 million. For example, the
average car has about 1.2 tons of steel, so the tariffs would increase the cost of a car by
about $300. This could lead to an estimated loss of 40,000 jobs in the auto industry
as consumers buy cheaper imports.^4 The beer industry was also concerned about
increased prices due to the higher costs of aluminum cans. MillerCoors, for example, said
that it was “disappointed” in the move and that it “is likely to lead to job losses across the
beer industry,” while the Beer Institute said, “Imported aluminum used to make beer cans
is not a threat to national security” (in reference to Trump’s rationale for imposing the
tariffs).^5 In short, trade policies aimed at helping one segment of the economy come at
the expense of another part, which creates political conflict.Conflict over economic policy goes beyond trade policy. Many of America’s political
debates concern economic policy: Should we run deficits or have balanced budgets?
Should we have a largely unregulated free market—or regulations for things like
pollution and health care? Should we spend more money to create “green jobs” and
promote alternative energy, or subsidize more offshore drilling and build pipelines to
maximize the extraction of oil and natural gas? Democrats tend to favor a more activist
government that supports a broader range of redistributive programs and regulates
the economy to ensure a range of public goods, such as rebuilding the infrastructure.
Republicans tend to favor a more limited approach to government that promotes lower
taxes and less regulation and allows the free market to determine more social and
economic decisions, such as allowing greater development of domestic energy sources.Critics of the president’s position tout
the value of free trade in increasing
wealth, reducing consumer prices,
and promoting the efficient allocation
of resources. While President Trump
tried to take steps to actively support
American manufacturers, companies
like motorcycle manufacturer Harley-
Davidson continued with plans to close
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