In the text it is seen that the steel industry in the United States was very severely adversely affected because of dumping. Hence the placement of protectionist policies will first and foremost, benefit the domestic economy- jobs will be saved as domestic demand will shifted to domestic steel products- which will hence increase the demand for labour in the steel industry. The tariffs mentioned in the text also help domestic firms to become more competitive and to eventually sell their steel at globally competitive prices. The domestic government would also gain revenue in the process. The foreign producers will lose out however, as they must now incur higher costs of production and they receive less export revenue- if the severity of these steel tariffs are great then foreign countries may retaliate- which hampers international relations as well as future trade prospects.

Protecting the steel industry in the US allowed domestic firms to increase production and employ more workers- by reducing the competitivity in the market, the US government was able to allow domestic firms to stay afloat in the market. As a result, these steel producing firms increased production, and hence lead to a positive gain in the US’s economic growth- in the form of ‘billions of dollars’ worth of employment opportunities, steel consumption and expenditure. On the other hand, there is a large assumption that the use of protectionist measures will automatically benefit the consumers and the domestic economy in general, but this may not be the case as protecting the domestic firms may make these American steel producers complacent and over-reliant on the trade protection. These firms may misuse the opportunity to stay in the market provided by the trade protection and supply low quality steel in the domestic market at prices higher the global average. As a result, the domestic American consumers of steel may not necessarily get the benefit of being supplied with higher quality steel, and suppliers may not compete to produce lower price and higher quality steel. 

In the short run, the American economy got a long-needed relief from highly damaging trade practices- being able to save jobs and increase production of an essential good by implementing trade protection; but in the long run, it is possible that foreign countries may retaliate, or that a limit is reached of the American producers to supply at a certain price and quality, which international suppliers may exceed- hence causing American consumers to lose out on lower cost, higher quality substitutes. 

Overall, the arguments for trade protection are strong in this case- since the general state of the domestic economy obviously takes importance over foreign relations and the interests of foreign suppliers. This protection allowed the US to pull itself out of a very serious market condition and increase economic activity in its steel sector. Although the drawbacks of lack of incentive, and lack of competition are considerable, their importance and magnitude is much less as compared to the long term economic benefits of protecting the steel industry.

Tariffs are taxes implemented upon imported goods, and is one of them most common type of trade protection.

In the US, the domestic market was devastated and had gone through a difficult time considering the numerous job losses and bankruptcies. They had also been a victim of dumping from other countries. Hence, President Bush implemented a 3-year program of tariffs on certain steel products with a goal to revive its comparative advantage.

This program would have a handful of benefits. 

Firstly, the domestic producers and firms would be better off. This is because there would be a decrease in the imports. As a tariff is implemented, foreign countries would be discouraged to export as much because it would cost them an additional tax. Hence, they reduce the amount they export. This gives a chance to domestic producers to increase quantity supplied.

Furthermore, domestic producers also gain from this tariff as they receive a higher price. The new price after the tariff would rise to the original price plus the new tax for imported goods. Hence, domestic producers would be able to sell a larger amount of goods for a higher price. This is a big advantage to domestic producers.

Since producers increase their quantity supplied. They also need to increase their factors of production, one of them being labour. Domestic employment would increase as the quantity supplied by domestic producers would increase.

The government would also benefit. The government would make revenue from the tariff imposed on imported goods. This value can be calculated by multiplying the amount of the tariff by the number of imported goods. Tariff revenue is earned by the government from the consumers as they are the ones who pay the tariff taxes. It represents income that is transferred from consumers to the government.

However, the tariffs will also cause several drawbacks to both domestic and foreign stakeholders.

Domestic consumers will be worse off as the price of the imported good will increase with a tariff imposed on it. The new price would be the initial price plus the tariff per unit. As a consequence, domestic consumers might not be able to purchase the same amounts as they used to.

Foreign producers are also worse off as now they will be exporting a lower amount of goods due to the tariffs and decrease in imports in the host country. As a consequence, foreign producers will lose on export revenue with the fall in exports.

The tariff is a type of regressive tax, which means people with lower incomes are burdened more than those with higher incomes. This causes the income distribution in the importing country to worsen.

Although there will be an increase in domestic production, these domestic producers consist of relatively inefficient producers. As a consequence, the wastage of resources is higher. The reason these goods were bing imported was because the particular foreign country specialised at producing that product, whereas it is not as efficient in the importing country itself. Hence, the tariff will cause a decrease in imports, but it will also cause an increase in inefficient production.

Since this is a 3-year program, stakeholders who are worse off will remain that way for a while. In the short-run, it is good for the US as they would have controlled the dumping situation and also increased employment. Although the drawbacks are way more than the benefits in number, the government weighs domestic relations higher than foreign relation. Therefore, the arguments for the trade protectionism are much stronger than that against it.