Question

Explain how trade barriers save jobs in protected industries, but only by costing jobs in other industries

Short answer

Though trade barriers save jobs in protected industries, but it also cost the jobs in other industries.

Step-by-step solution

Step 1. Meaning of trade barriers.

It refers to the measure that the government takes to control import and export activities.

Step 2. Trade barriers used by government.

It include import and export tariffs and also quotas. Most of the countries prefer to use tariffs rather than quotas.

Step 3. Trade barriers save jobs.

The price of goods in protected industries are raised due to trade barriers. Sales fall in other industries were these products are inputs in other industries, because it raises their production costs and then prices. Lower sales lead to lower employment.

Additionally, if the protected industries are consumer goods, their customer pay higher prices, which reduce demand for other consumer products and thus employment in those industries.