What is protectionism and how does it affect global trade?

What is protectionism and how does it affect global trade?

Protectionism is an economic policy that restricts imports from other countries through tariffs, quotas, and other regulations. It aims to protect domestic industries from foreign competition.

Can you give me examples of protectionist measures?

Sure! Common protectionist measures include tariffs on imported goods, import quotas, and subsidies for local businesses.

What are the potential downsides of protectionism?

The downsides include higher prices for consumers, potential trade wars, and reduced economic efficiency due to lack of competition.

How do countries justify protectionist policies?

Countries often justify protectionism by citing the need to protect jobs, national security, and emerging industries.

Is there a historical example of protectionism affecting a country's economy?

Yes, the Smoot-Hawley Tariff Act of 1930 in the U.S. raised tariffs on many imports, leading to retaliatory measures and worsening the Great Depression.