Question

Domestic producers of steel rods send a lobbyist to the U.S. government to request that the government impose trade restrictions on imports of steel rods. The lobbyist claims that the U.S. steel-rod industry is new and cannot currently compete with foreign firms. However, if trade restrictions were temporarily imposed on steel rods, the domestic steel-rod industry could mature and adjust and would eventually be able to compete in the world market.
Which of the following justifications is the lobbyist using to argue for the trade restriction on steel rods?

a Jobs argument
b. National-security argument
c. Infant-industry argument
d. Using-protection-as-a-bargaining-chip argument
e. Unfair-competition argument

Answer 1

Answer:

C. Infant-industry argument

Explanation:

The lobbyst is using the infant-industry argument because he is claiming that all that the emerging national industry needs is some temporary trade restrictions until it can develop enough to compete.

This argument is very commonly used against free trade, and is based on the belief that national industries should be allowed to grow in isolation before opening up the markets. The problem with this argument is what happens if the national industry remains uncompetitive even after a long period of trade restrictions.