U.S.-China Trade: Why Protectionism Hurts Both Economies
This paper analyzes the trade relationship between the United States and China, the second-largest U.S. trading partner, focusing on the debate over protectionism versus free trade. Drawing on David Ricardo's theory of comparative advantage, the paper argues that protectionist measures — however politically appealing during economic downturns — ultimately harm the very workers they are designed to protect. The paper examines three major negative consequences of protectionism: retaliatory trade measures, market distortions, and industrial complacency. It concludes that while free trade produces short-term losers in specific sectors, the aggregate benefits to consumers and the broader economy outweigh the costs of shielding uncompetitive industries.
- Introduction: U.S.-China trade deficit and protectionism debate
- Ricardo and Comparative Advantage: Ricardo's theory as foundation for free trade
- Arguments for Protectionism: Jobs, security, and currency distortion arguments
- Cultural Values and the Costs of Protectionism: Three negative impacts of protectionist trade policy
- Conclusion: Free trade benefits outweigh protectionist short-term gains
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What makes this paper effective
- The paper anchors its argument in a well-established economic theory — Ricardo's comparative advantage — before applying it to a concrete, contemporary policy question, giving the analysis both academic grounding and real-world relevance.
- It fairly acknowledges the strongest counterarguments for protectionism (job losses, national security, infant industries) before systematically refuting them, lending the argument greater credibility.
- The use of the Smoot-Hawley Act as a historical case study provides concrete evidence that protectionist policies produce damaging retaliatory effects, making the argument persuasive rather than purely theoretical.
Key academic technique demonstrated
The paper demonstrates refutation through structured enumeration: it organizes the negative consequences of protectionism into three clearly labeled impacts (retaliation, market distortion, and complacency), which signals analytical rigor and makes the argument easy to follow. This technique is particularly effective in policy essays where the writer must dismantle multiple opposing claims in a logical sequence.
Structure breakdown
The paper follows a classical argumentative structure: an introduction that states the thesis, a theoretical foundation section (Ricardo), a section presenting the opposing view (protectionism arguments), a central analytical section identifying three costs of protectionism, and a conclusion that synthesizes the policy implications. Each section builds on the previous one, keeping the argument cohesive from theory to application to judgment.
Introduction
China is the second-largest trading partner of the United States after Canada (Census.gov, 2009). This trading relationship has fundamentally altered the economies of both countries, as well as the shape of global trade itself. The nature of the trade is based heavily on U.S. importation of low-priced Chinese goods from a wide variety of sectors. This has created a massive trade deficit between the U.S. and China, a situation exacerbated by historically low U.S. savings rates and historically high Chinese savings rates, along with the peg of the yuan to the dollar.
There are calls, however, for this trade to be curtailed somewhat. Trade between the U.S. and China has resulted in a massive transfer of wealth across the Pacific, which has in turn had many negative consequences for the U.S. economy, including hundreds of thousands of lost jobs in manufacturing. U.S. firms complain that the cost of doing business in China is so low that they could not compete even if they paid their workers nothing. This raises the question: is protectionism warranted to protect U.S. economic interests?
It is tempting to enact protectionist measures in difficult economic times, and indeed this trend has been increasing as a result of the global financial crisis (Evenett, 2009). However, this trend is misguided. This paper will show that protectionism hurts economies, even the workers the measures are designed to protect.
Works Cited
No author. (2009). Top ten countries with which the U.S. trades. Census.gov. Retrieved December 6, 2009 from
No author. (2007). David Ricardo and comparative advantage. NetMBA.com. Retrieved December 6, 2009 from http://www.netmba.com/econ/micro/comparative-advantage/
US Department of State. (no date). Protectionism in the interwar period. U.S. Department of State. Retrieved December 6, 2009 from
Evenett, S. (2009). The G20's assault on world trade. VOX. Retrieved December 6, 2009 from
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