During the past decade and as a result of the huge US trade deficits and increased globalization of the international economy, US trade policy has become much more controversial as it shifted in emphasis away from non-discriminatory multilateralism and toward aggressive bilateralism and protectionism. In this review, I will (1) briefly review the background for the increase in US protectionism in recent years, (2) summarize present US trade laws and their implications for protectionism, (3) examine current US trade policies and actual protectionism, (4) summarize the most notorious examples of increased US protectionism (that on textile and apparel, steel, and automobiles), (5) examine the political economy of protectionism, (6) discuss the relationship between the new protectionism and strategic trade policies in the United States, (7) evaluate the importance of the formation of three major trading blocs for the future of US protectionism.
Background of present US protectionism
Trade policy in the United States over the past thirty years has been marked by continuous tension. While the United States has generally adhered to the principle of free trade, it has made an increasing number of compromises or exceptions to protect textiles, steel, automobiles, and other industries in exchange for political support for the general principle of free trade, in the general context of increased global competition, unemployment, and lagging growth. The instruments used to restrict imports were also different from and less transparent than traditional import tariffs and quotas.