The impact of US tariff on the labor market

Abstract

This study examines the effects of anti-dumping measures on real wage and labor employment in the United States, to determine if protectionism is able to bring potential benefits to every US citizen. A regression analysis is tested on the 2002 steel tariff, along with the composition of a mathematical framework build on the fundamentals of New Trade Theory (Melitz, 2012, pp. 1-54) [8]. The results are that real wage can improve under tariff imposition, albeit at the cost of employment. However through the mathematical framework and the quantitative analysis we examine further that different labor market structure can offer differing views of labor participation and real wage improvements under protectionism.