Protectionism is the economic policy of promoting favored domestic industries through the use of high tariffs and other regulations to discourage imports. Historical variants of this policy have included mercantilism, a trade policy aimed at maximizing currency reserves by running large trade surpluses; and import substitution, a trade policy in which targeted imports are replaced by local manufactures in order to stimulate local production.
Recent examples of protectionism are typically motivated by the desire to protect the livelihoods of politically powerful groups, such as farmers in the United States and European Union, who in the absence of tariffs might be unable to compete with lower-cost foreign producers. In recent years, there has been a renewed discussion of protecionism due to offshore outsourcing. Most economists view this form of protectionism as a disguised transfer payment from consumers (who pay higher prices for food or other protected goods) to local high-cost producers.
It is the stated policy of most First World countries to eliminate protectionism through free trade policies enforced by international treaties and organizations such as the World Trade Organization. Despite this, many of these countries still maintain tariff barriers to protect some favored industries, and the elimination of such barriers remains a contentious political and diplomatic issue. China and Japan have been accused of protectionist policies that peg their currencies to the dollar-and thus set prices of their exports lower than they would be if the market determined the relative prices each currency.
Traditional protectionists fault the free trade model as being reverse protectionism in disguise, that of using tax policy to protect foreign manufacturers from domestic competition.
China and Japan have been accused of protectionist policies that peg their currencies to the dollar and, thus, set prices of their exports lower than they would be if the market determined the relative prices of each currency.
Protectionist quotas can cause foreign producers to become more profitable, mitigating their desired effect.
The rate of duties was pressed ever higher; and when the war closed, and the taxes could again be lowered, the protectionist managers knew how to lower or remit altogether the non-protective duties, and thus keep high, and even advance to a still higher point, the duties which protected them from foreign competition.
protectionist who believed in protection as a preparation for free trade, and finally an uncompromising advocate of protection in all circumstances and for all nations.
languages, and contributed doubtless to the spread of protectionist ideas, though the extreme form in which his views were expressed, and the rambling illogical method of exposition, repelled many who might otherwise have been attracted by the course of his thought.
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