The owners of steel companies in the United States have argued that they need to be protected from foreign competition because the wages paid to workers in foreign countries are significantly lower than the wages paid to US steel workers. What is the best economic response to this argument?
◦ It is essential to protect the steel industry so that there are no additional job losses in this industry.
◦ Wages reflect productivity and if US steel workers are more productive than workers in foreign countries then the US steel industry should still be able to compete internationally.
◦ Even though US workers earn more than workers in foreign countries, the United States would still have an absolute advantage in the production of steel and should therefore be able to compete internationally.
◦ The steel industry should be protected from foreign competition because low foreign wages are an unfair barrier to trade.
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