US Limits Chinese Imports

As I was browsing the internet for an article that fit in with the curriculum of our public choice class, I stumbled across an interesting article from the Washington Post called "US Limits Chinese Sock Imports"http://www.washingtonpost.com/wp-dyn/articles/A55580-2004Oct22.html. As we have learned in class, trade restrictions can be important for the economy. Yes, they can be damaging to the domestic economy, but they can create rent (monopoly profit) for the domestic producers, which is considered beneficial. But, have you ever wondered what would happen if these quotas were lifted. According to this article, if it wasn't for the Bush administration, who extended the quota restrictions for Chinese sock imports, the US economy might have felt the impact sooner rather than later. These quotas were set to be lifted January 1st, thus allowing apparel companies to freely import from anyone around the world, enabling China to take over because of their low costs and high efficiency. This would actually cause the US textile makers to suffer more losses and continue to drive many of them out of the market, which isn't good for the domestic economy. According to James Jochum, assistant secretary of commerce for import administration , Chinese imports have "had a significant impact on the US industry", which has helped to drive about one-quarter of all US sock manufacturers out of the business and reduced the market share of the domestic industry from 83 percent in 2001 to 68 percent last year. Also, Jochum said that capping sock imports would be good because they have caused "both disruption and a threat to disruption" in the US market. Hoping the sock import quotas weren't lifted, but extended, the US textile makers asked Washington to take action and extend the quotas, allowing US textile and apparel makers to stay afloat in a demanding industry. The administration looked at the issue and concluded that these quotas do in fact need to be extended, thus reducing the amount of Chinese sock imports, with hopes of helping the US economy. Not only does this decision affect the sock market, it has the potential to affect other imported products from China. Now, everyone is just waiting on the administration's decision. I find the administration's decision to be justified. By extending the quotas, I think the US economy will improve. I know that it will not fully correct the problem of importing cheaper products from foreign manufacturers, causing US textile makers to lose their jobs, but it is a step in the right direction for potentially getting more jobs for the people of the United States because when people demand less from foreign producers, their Price will increase, causing a greater quantity to be demanded domestically. Hopefully, this will allow more domestic firms to re-open and keep a close eye on the ones that have lower costs and higher efficiency.