Alternative policy

[Related to the Making the Connection on page 360] For several years, the United States imposed a tariff on tire imports. According to an analysis by economists Gary Clyde Hufbauer and Sean Lowry of the Petersen Institute, of the additional $1.1 billion consumers spent on tires as a result of the tariff on Chinese tires, the workers whose jobs were saved in the U.S. tire industry received only about $48 million in wages. Wouldn’t it have been cheaper for the federal government to have raised taxes on U.S. consumers and given the money to tire workers rather than to have imposed a tariff? If so, why didn’t the federal government adopt this alternative policy?

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