Trade policy assumes public importance when

Trade policy typically reaches the public consciousness and the media when some national producers complain that there is distorted trade in the goods they produce. Often producers are concerned because imported goods cut into their sales, keep them out of markets abroad, and similarly cut into profits and cost jobs at home. To understand the domestic politics of trade, we need to know the interests in question, the institutions through which these interests are expressed, and how competing interests interact with one another. There are both benefits and costs to trade barriers. Virtually all tools of trade protection, whether tariffs, quotas or other restrictions, make imports more expensive, which allows domestic producers to sell more of their products, to raise their prices, or both. When tariffs are imposed on foreign steel imported into the United States, American steelmakers can expand sales at higher prices. As a result, they may be able to increase profits, raise wages and hire more workers. Quotas, which restrict the quantity of foreign goods sold in the national market, ultimately have a similar impact, in that the reduction in imports reduces supply and thus raises prices. So trade barriers assist national producers. The most direct cost of protection is to consumers of the protected good. Producers gain and consumers lose from protection. A trade barrier introduces economic inefficiencies. It leads consumers to consume less of those goods that protection has made artificially expensive.