Protectionism Reduces Domestic Competitiveness

Steps:

• Restricting imports shields US steelmakers from foreign competition, allowing higher prices and profits.
• Without pressure from cheaper Chinese steel, US producers face less incentive to innovate or cut costs.
• Over time, this leads to inefficiency, making US steelmakers less competitive globally.
• The unintended result is weakened long-term market position for domestic industry.

Why B is correct:

• Trade protectionism, per economic theory, reduces competitive pressures, leading to complacency and lower efficiency (deadweight loss in supply-demand models).

Why the others are wrong:

• A: Restrictions raise import prices, so US importers pay more, not less.
• C: While production may rise short-term due to less competition, long-term efficiency suffers, not guaranteed increase.
• D: Higher incomes for workers are intended, not unintended; restrictions aim to protect jobs and wages.

Final answer: B