I recently received a request from Jim Carter, associate director of the National Economic Council based in the White House, for my opinion on the additional steel tariffs supported by President Bush. After expressing opposition to this policy, I received a document explaining the president’s position.The document said that “…these tariffs will help steelworkers, communities that depend on steel, and the steel industry adjust without harming our economy.” The phrase “without harming our economy” makes the statement false.Economic theory and evidence convincingly details that any restriction on free trade makes the whole worse off – that is, harms the economy in the long term. This is the reason we don’t restrict (with tariffs and other protectionist measures) trade between people within a community or between people who live in different states. The fact that the trading partners happen to live in different countries does not change this fact.If United States steel firms ever had a comparative advantage in steel, they have lost it to other countries, just as we have historically never had or lost our comparative advantage in other products. The steel industry has been protected almost since its inception, and it has continually required more protection to survive.Even if other governments impose tariffs, this is no reason for our government to do so. And if people in other countries allow their governments to subsidize the production of steel, so be it. This allows American consumers to enjoy products made of steel at lower prices. But this is no grounds for our government to penalize American consumers of products made with steel through higher tariffs and thus higher prices regardless of where it is produced. In both cases, tariffs and subsidies – wrongs committed elsewhere – do not provide sufficient grounds for us to commit the same wrongs.It is not the duty of the government to ensure that particular firms or industries survive the test of the global marketplace.The hypocrisy of it all is very interesting. While proclaiming the United States to be the world’s free trade leader, President Bush made the decision to impose the most comprehensive protection in the history of the U.S. steel industry and the biggest anti-trade measure in the United States since World War II.This was not done for sound, long-term economic reasons but rather for short-term political reasons. It was done as part of the campaign to win seats in elections later this year, especially in steel-producing states such as Indiana, Ohio, Pennsylvania and West Virginia.The New Orleans region will be adversely affected by these additional tariffs in additional ways. First, much of the steel imported into the United States comes through the Port of New Orleans. As the amount of imported steel falls, the port will earn less revenue, and local jobs will be lost. This reduction in income will have a negative effect on many individuals and businesses in the area. Second, there were different rates of increase placed upon different types of steel in the Bush initiative. As it happens, the particular products produced by the local Bayou Steel Company will rise in price by the smallest percentage rate and thus will not enjoy nearly the level of protection afforded steel makers of different products in other parts of the country.Government policy decisions repeatedly cater to special interests that promise economic and political support for those politicians who use the political muscle of government to cater to the well being of those in the special interest groups. They do this while milking the majority of Americans who are unorganized and are victims of the rational ignorance effect that is characteristic of all democracies.Lovers of freedom had hopes that President Bush would promote more free trade between nations and less intervention that restricts trade between people. But it appears he is like almost every other politician. He will do what is in his own best interest rather than what is best for the entire society.Am I surprised? No. Am I disappointed? You guessed it.

Michael Saliba is an associate professor of economics