Protectionism
Protectionism means that a country has laws or other rules that make it easier for their own products and brands to sell by making goods from foreign countries more expensive or harder to get.
The idea of protectionism is to stop imports (when people buy goods from other countries instead of from their own). Mercantilism is one kind of protectionism.
For example, if farmers from Argentina are selling wheat at a lower price than French farmers are, French people would buy more wheat from Argentine farmers than from French farmers, and French farmers would not get so much money.
The benefits to protectionism is that some people in a country would make more money because they would be able to sell things at higher prices, but on the other hand, other people would lose money because they wouldn't be able to buy the things from other countries that sell them cheaper.
Many protectionists (people who believe in protectionism) support big tariffs (taxes on a trade involving a foreign country) because the government can get a lot of money from the tariffs.
When a country raises a tariff on another country, usually the other country raises their tariffs on that country to get even. This is called a trade war.
Tariffs were popular in the United States during the 1800s, but when the United States made the Hawley-Smoot Tariff a law in 1930, it raised tariffs very high on Europe. In response, Europe raised its tariffs on the United States, which resulted in a trade war. Many economists and historians believe that the tariffs made the Great Depression worse.
Trade-protectionism is favoured by economic nationalists and left-wing parties.
Protectionism is no longer popular now. Instead, people support free trade (the opposite of protectionism where the government makes it easier for the country to trade with other countries). Free trade is favoured by right-wing parties.
Protectionism Media
Political poster by the British Liberal Party presenting their view of the differences between an economy based on free trade versus one based on protectionism. The free trade shop is shown as full of customers due to its low prices. The shop based on protectionism shows higher prices and a lack of customers, and with animosity between the business owner and the regulator.
Anti-free trade postcard from 1910
Logo of Belgium's National League for the Franc's Defense, 1924
Tariff Rates in Japan (1870–1960)
Tariff Rates in Spain and Italy (1860–1910)
Tariff rates (France, UK, and US)
Average tariff rates in US (1821–2016)
US trade balance (1895–2015)
Protectionist measures taken since 2008 according to Global Trade Alert
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Related pages
Other websites
- What is protectionism? at wisegeek.com
