PRESIDENT REAGAN was clearly right to deny protection to the American copper producers. To refuse to protect a domestic industry in distress is always difficult for a president, and more difficult than ever in the midst of an election campaign. But it is generally true that import quotas and tariffs do more harm than good to the economy, and the copper industry is a particularly explicit example.
The American producers argued that their markets were being invaded by subsidized copper from abroad. Subsidized or not, the imports were setting the world price. If Mr. Reagan had given the producers the protection that they wanted, the immediate result would have been higher copper prices forced on all the American manufacturing industries that use copper. That in turn would have handicapped those American manufacturers in meeting their own foreign competition. As they lost sales, they then would have come to the government for protection from imports made with cheaper copper. Far more jobs would have been lost than saved.
Protecting primary metals is always particularly dangerous. If the government keeps out the crude metal because it is too cheap, it will enter the country in the form of finished products. That increases the impact on unemployment here.
Mr. Reagan's next major trade decision will be the steel case, due later this month. That one will be a good deal more important than the copper decision -- in terms of jobs, dollars and implications for American industrial policy generally. But the issues will be similar. Again, the domestic industry claims that its foreign rivals are being subsidized. Again, it seeks import quotas that would raise steel prices for American manufacturers and leave them at a disadvantage in their own struggles to hold their markets against foreign competitors. A higher domestic price for steel would be welcomed by the steel makers, but it would be a real threat to American automobile manufacturers.
There has been much speculation that, as a matter of political tactics, denying protection to copper gives Mr. Reagan more latitude to help steel. Mr. Reagan has always strongly advocated open markets. In view of all those speeches and statements, according to this line of reasoning, perhaps he felt that he could not protect both the copper and steel industries -- and, having to sacrifice one of them, chose the one that was less powerful and more dispensable. That suggestion seems excessively cynical, even by the standards of trade politics.
International trade is one area to which Mr. Reagan's doctrine of the free market really applies, and in which he can genuinely strengthen the economy by pursuing it. He followed the right principle in the copper decision, and the principle is the same in the steel case.