Quotation of the Day…

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… is from page 59 of the 5th edition (2020) of Douglas Irwin’s excellent book Free Trade Under Fire (footnote deleted):

Protection had insulated less productive firms from foreign competition and allowed them to drag down overall productivity within an industry, whereas open trade weeded out inefficient firms and allow more efficient firms to expand. Thus, trade brings about certain firm-level adjustments that increase average industry productivity in both export-oriented and import-competing industries.

DBx: Remember this reality whenever you encounter claims that higher tariffs are an obvious means of enhancing America’s national security.