Imports from China Analysis - Essay Example

The government ought to adopt policies that improve the American economy. Implicit in this second perspective is the thought that protectionism (not allowing imports from China) will bring jobs that have been outsourced and entrusted to China back to the United States, resulting in a vibrant, more productive economy.

It is a fact that nearly 200,000 American jobs have been displaced by Chinese imports (Scott) in Wal-Mart Corporation alone. Those who hold protectionism as the answer for creating jobs in America hold this example as an expression of an underlying truth: that imports need to stop for the economy to improve. However, what is the overall economic impact of saving these jobs? According to an OECD report, stopping imports from China will hurt the American economy, costing $2.16 for every $1 rise in tariffs and dropping world income by $0.73. When a country implements such policies, production does indeed come back to that country; however, since they cannot make those goods as efficiently, consumption decreases because prices go up. Less consumption means more costs and a return to the original problem.