Protectionist restrictions on cheaper foreign product imports can cost more jobs than are saved. A domestic company forced to use the more expensive product in their manufacturing are at a competitive disadvantage with foreign rivals.

The government might choose to restrict the import of a product like steel to save the jobs of domestic steel manufacturers, which comes at the expense of more jobs elsewhere. All products made of steel will cost more than their foreign-made counterparts using cheaper imported steel. The manufacturers of these products are now at a disadvantage domestically and internationally. Steel tariffs produced $240 million in additional profits and saved about 5,000 jobs. These savings came at the expense of $600 million of other American companies’ profits and caused a loss of 26,000 jobs.