Planet Money Summer School Govt 7: Trade blocks and blockages (Trade Policy)
Aug 20, 2025
Carolyn Freund, Dean at UC San Diego’s School of Global Policy and Strategy, shares her expertise on trade barriers and protectionism. She explores how tariffs and regulations can unintentionally raise prices for everyday goods like candy and cars. Discussions reveal the complexities of the sugar industry and how protecting American producers can hurt manufacturers. Freund also highlights the challenges posed by differing automotive safety standards between the U.S. and Europe, emphasizing the cultural influences on trade policy.
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Trade Policy Distorts Resource Use
- Government trade interventions distort resource allocation and raise costs for consumers and industries.
- Producing goods where resources are cheapest yields more output and benefits everyone.
Candy Factory's Sugar Pain
- Spangler Candy uses about 100,000 pounds of sugar a day and faces a roughly $0.15 per pound U.S. price penalty.
- That penalty translates to millions of dollars extra annually and influences production location decisions.
Law And Lobbying Keep Sugar Expensive
- U.S. law (the Farm Bill) guarantees a minimum domestic sugar price, keeping U.S. sugar above world prices.
- Political power and concentrated local economic impact sustain the protection despite higher consumer costs.