Question

2. The US labour unions, which mostly represents blue-collar workers (not professionals and highly educated workers) has traditionally favoured imposing limits on imports from poorer countries. Is this a shortsighted policy or is it a rational one in view of the interests of union members? How does the answer depend on theory? Use the back of this page to write a clear answer explaining your thoughts on this.

Use graphs if needed.

Answer 1

Answer-

This is a short cited policy because ultimately these laborers are themselves consumers. Ultimately they have to pay higher prices for these goods. Furthermore import substitution can't save them. In reality export promotion of goods in which usa has comparative advantage is in best interest of labour. But other countries will apply tariffs on usa exports if there own exports to usa are charged a higher tariff rate. Yes it depends on model of trade E. G in H-O model it is completely wrong to do so whileas as per some other models like Mercantilists it is quite good