In 2002, President George W. Bush imposed tariffs on certain types of imported steel. He argued that
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In 2002, President George W. Bush imposed tariffs on certain types of imported steel. He argued that foreign steel producers were dumping their steel on the U.S. market at low prices. The foreign steel producers were able to sell steel cheaply because they received subsidies from their governments. The Bush administration argued that the influx of steel was disrupting the U.S. economy, harming the domestic steel industry, and causing unemployment among U.S. steel workers. What might a classical economist say in response to these claims? Would a Keynesian economist be more or less sympathetic to the imposition of tariffs? Why?
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