1) Do protective tarriffs cause American products to cost less?
Yes. Explained more in answer two.
2) Is there any reason to improve quality or reduce costs if you have a protected US market?
As Mills points out there is plenty of domestic competition to keep prices down, but beyond that there is still foreign competition. Tariffs should be used to help level the playing feild... not eliminate foreign goods altogether. The increased costs due to tariffs will cause foreign markets to continue to find better ways to produce and export goods to make up for the increased tariffs. This will force US manufacturers to stay competitive as well.
3) Who reaps the benefits of cost reduction in a protected market?
Everybody. Market prices are always driven by the consumers. Simple supply and demand. A protective market is still competitive and will still be influenced by consumers needs and demands.
4) Will the US consumer pay more for items if protective tarriffs are in place?
Probably, but as Mills points out, it will probably be offset by increased taxes collected both from increased tax bases and from tariffs collected. Beyond that the US worker will have the higher paying jobs along with benefits that they once had in the first place. This too would help offset the increased prices. Beyond even that, staying competitve in manufacturing requires research and development. The return to manufacturing in this country would not only increase better paying manufacturing jobs but also even higher paying technical/white collar jobs.
5) Has the US economy lost jobs overall over the last couple of decades?
Increased jobs over all but the trade off has been higher paying jobs with benefits for lower paying retail jobs without benefits.
6) Has the overall standard of living in the US risen or declined in the last couple of decades?
yes the standard of living has increased. But I do not see this trend continuing. Right now the dollar is still relatively strong but it is slowly declining in value. What happens if we continue to lose jobs, send our money overseas, and invest in foreign countires instead of our own? The dollar will continue to decrease while other currency will begin to rise. When our dollar has sunken low enough that other countries are no longer interested in investing in US debt those cheap imports we are so used to will begin to cost us a lot more. We have already seen it with oil.
With oil prices tied to the dollar and the Euro still relatively weak, the oil producing companies were fine sending us cheap oil and making Europe foot the bill. But, the dollar slowly declined and the exchange rates switched and the Euro is now worth more than the dollar. All of Europe was getting cheap gas in relation to what they were paying when the dollar was strong. The ME felt they were getting ripped off so they cut production decreasing the supply and increasing the demand. Prices Sky rocketed. They are still at an all time high. We are paying the most for the increase because of our weak dollar and the fact that oil prices are tied to the US dollar.
Those cheap imports start getting pretty expensive after awhile.
American factories will not be as productive as ones in South America or Asia, because in South America and Asia there are very few employment laws. It's not just a matter of wages and work rate. Poor countries need jobs for their people so companies are give tax breaks to manufature in the country. People work 12 hour days, for a few dollars a day that's not 1/6th of what americans working get, thats closer to 1/6th of what an american worker earns in an hour. When a nation demads taxes, allows unions, puts in place a "high" minimum wage, the company move across a border. This also give companies a great amout of influence over the goverment as large numbers of people are employed by them and upsetting could cause large scale unemployment.
America can't compete with poorer countries in manufactering. That's a fact.
The argument that cheaper goods will make more jobs in the service sector doesn't seem to really help the worker in the developed world. Consumers are paying less and profits are going up, shops assistance wages are staying the same. The growth in consumer sepending seems to be benifiting massive shopping outlets, they buy in much larger qualities so the price can be lowered further and they sell everything so it's more convinent to have everything under one roof. Smaller shops have to cut costs to compete, if they are buying the same cheaply produced goods but are unable to buy in the bulk that larger shops do then the only place they can save money is on workers wages. However the big shops don't pay much more that the going rate for workers, so their strangle hold on other shops also helps keep their wages low. Usally the small shop won't be able to compete and closes leaving the large shop with even larger control over the employmet (and consumer) market.
I don't belive that the movement of whole sections of the employment market out of an area will make sufficient savings for companies to grow enough to employ the workers put out of a job by the move. I don't belive this sort of policy will help nations develop. It seems the only people who will benifit will be people who didn't need much help in the first place.
EDIT: Also why did any South American country argee to enter this, when it's clear been nothing but bad for Mexico?
