US President Donald Trump’s protectionist policies had a surprising critic in William Dudley, President and Chief Executive Officer of Federal Reserve Bank of New York and Vice-President of Federal Open Market Committee.

Without pointing to Trump or his policies, Dudley on Thursday said said protectionism can have a siren-like appeal and viewed narrowly, it may be potentially rewarding to particular segments of the economy in the short term, but in the long term it would almost certainly be destructive to the overall economy. Countries need to compete better, not compete less. Trade barriers are a very expensive way to preserve jobs in less competitive or declining industries. They blunt opportunities in export industries and they reduce the affordability of goods and services to households, said Dudley.

Indeed, such measures often backfire, hurting both workers and growth, he said while addressing industrialists, he said.

“There are many approaches to dealing with the costs of globalisation, but protectionism is a dead end. Trade restrictions address the symptoms and not the underlying problems, and they introduce other costs and distortions,” he added.

While such measures might generate temporary boosts to growth from greater domestic production and consumption, these would likely be offset by a range of other costs and would retard productivity growth and thereby shrink the economic pie, Dudley said.

The protectionist country would produce more goods in sectors protected by higher trade barriers but also fewer goods for export. Raising trade barriers would risk setting off trade wars, which could damage economic growth prospects around the world, he added.

Researchers who have studied this closely estimate that the costs per job saved from protectionist measures in the US typically run into the hundreds of thousands of dollars per year.

Dudley gave the example of the case of import restrictions on Chinese tyres. The cost of a job saved was estimated at $900,000 per year while the measures were in place, or over 20 times the average worker’s compensation.

Rather than protectionism, a better policy would be to help domestic workers and companies compete more effectively, rather than compete less, he added.

“We need to provide greater support to displaced workers so they can obtain the skills needed to find new well-paying jobs,” he said.

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