This assignment is about trade protection which,as we have discussed, certain countries have historically usedto protect their favorite industries. Beginning 2017, the Trump administration began advocating this approach claiming it would protect American jobs. While that policy may be changed under a new Biden administration, it does serve as a concrete example of the role of tariffs and their effect on an economy. So, it teaches us a valuable lesson. Given this,

(a)Redraw the relevant graph from the lecture and identify regions of loss and gain and who the loser and the gainers are. Then identify the overall effect. (hint: We studied several trade related graphs from the slides. You need to choose the graph that is suitable for this question.)

(b) Apply your analysis to the case of US steel industry where the Trump Administration imposed tariffs on steel imports to protect the industry. Identify which groups or industries correspond to gainers and losers in this case. Provide a specific example. (hint: the word consumer here means something a bit different. Think before you answer.)

(c) Draw your overall conclusion in terms of the overall economy as to whether this is a policy the US should or should not pursue.