Definition
Protectionist measures include tariffs, quotas, subsidies, local-content rules, and import restrictions.
Political Dictionary
Protectionism
Protectionism uses trade barriers to support domestic industries.
Why It Matters
They may protect strategic sectors or jobs, but can raise prices, reduce competition, and trigger retaliation.
How It Works
Governments impose barriers or provide advantages to domestic producers.
History
Protectionism has appeared throughout U.S. history, especially during industrial development and economic crises.
Example
A quota may limit the amount of a foreign product that can enter the country.
Common Misconceptions
- Protectionism always saves more jobs than it costs.
- It affects only foreign companies.
- Every industrial policy is protectionism.
Related Terms
- Fiscal Policy
- Monetary Policy
- Inflation
- Economic Growth
- Government Spending
Related Topics
See Also