Economists conclude, under some simple assumptions, that allowing free trade in an economy improves welfare for society overall. If free trade opens up a market to imports, then consumers benefit from the low-priced imports more than producers are hurt by them. If free trade opens up a market for exports, then producers benefit from the new place to sell more than consumers are hurt by higher prices. One of the main arguments against free trade is that, when trade introduces lower cost international competitors, it puts domestic producers out of business. While this argument isn’t technically incorrect, it is short-sighted. When looking at the free trade issue more broadly, on the other hand, it becomes clear that there are two other important considerations. Nonetheless, there are a number of common arguments made against the principle of free trade. Let’s go through each of them in turn and discuss their validity and applicability. Another common argument against free trade is that it is risky to depend on potentially hostile countries for vital goods and services. Under this argument, certain industries should be protected in the interests of national security. While this argument is also not technically incorrect, it is often applied much more broadly than it should be in order to preserve the interests of producers and special interests at the expense of consumers. Some proponents of trade restrictions argue that the threat of tariffs, quotas, and the like can be used as a bargaining chip in international negotiations. In reality, this is often a risky and unproductive strategy, largely because threatening to take action that is not in a nation’s best interest is often viewed as a non-credible threat. First, the loss of domestic jobs is coupled with reductions in prices of goods that consumers buy, and these benefits shouldn’t be ignored when weighing the tradeoffs involved in protecting domestic production versus free trade. Second, free trade not only reduces jobs in some industries, but it also creates jobs in other industries. This dynamic occurs both because there are usually industries where the domestic producers end up being exporters (which increases employment) and because the increased income held by foreigners who benefited from free trade is at least partly used to buy domestic goods, which also increases employment. People often like to point out that it’s not fair to allow competition from other nations because other countries don’t necessarily play by the same rules, have the same costs of production, and so on. These people are correct in that it’s not fair, but what they don’t realize is that the lack of fairness actually helps them rather than hurts them. Logically, if another country is taking actions to keep its prices low, domestic consumers benefit from the existence of low-priced imports.