Protectionism is Fueling Trade Deficits

The Jones Act, ostentatiously a protectionist piece of legislation, is unintentionally causing the trade deficit to increase.  The US is forced to look overseas for heating since shipping it internally is so expensive because of the Act.

The lesson to take away from this story is that controlling/regulating an economy is no straightforward act.  Passing protectionist legislation is no guarantee to reduce trade deficits, as we can see here.  Actions have unforeseen consequences, and can often result in the opposite of desired outcomes.  Economic activity is complex, and it is not merely a technological problem.

4 thoughts on “Protectionism is Fueling Trade Deficits

Comments are closed.