"Without trade expansion, you cannot expand at home as rapidly as you should, and you cannot develop co-operation with the rest of the free world," said David J. Steinberg last night.

In defending the Trade Expansions Act of 1962, Steinberg insisted that the American economy "must adjust to competition from imports to achieve the above objectives." Big companies have the necessary resources to make such adjustments, he declared.

Steinberg is consultant to the Committee on National Trade Policy, an organization supported by American businessmen to promote free trade.

He pointed out that imports of competitive goods often spur American industry to turn out a better product. The automobile industry, for example, originally expected great losses to result from American imports of European models, "but now foreign manufacturers are afraid of what Detroit is doing in the small car field."

In every industry, Steinberg conceded, some companies would be hurt by the pending trade bill. If competition from imports should force a business to re-locate, Steinberg's committee would favor the government helping in the job of relocation.

"But in most cases," according to Steinberg, "import competition is only a small part of the totality of the problem facing the American company." Much of the trouble lies within the American economy. Steinberg cited the labor retraining bill signed yesterday by the President as one appropriate measure to cope with the difficulties industry faces.