What is Protectionism
Protectionism is the act of the government imposing strict laws on the importation of goods from foreign countries in the process of benefiting the domestic industries. Protectionism seems like it works however if you look at its effect in the economy of the country and the globe in general there are some drawbacks along with it. Protectionism involves restricting trade between states through restrictive quotas, tariffs on imported goods and many other regulations imposed by the government. These measures are designed to ensure fair competition between domestic goods and imported goods however this only happens theoretically to the law enforcers.
The opposite of protectionism is free trade where states are allowed to trade freely without any strict restrictions in importation and exportation of goods. As much as imported goods bring stiff competition to the domestic goods since they normally come at very cheaper prices, in the end it is economically productive as compared to the act of protectionism. The reason why imported goods somehow tend to be cheap is because you will find that in some countries the cost of labor in manufacturing a product is cheaper than in another country, also the supply of the product in one country is more than in another country therefore, the final price of the product will be low and cannot be compared with a country whose supply is low or cost of production is high.
The logic behind protectionism is restricting foreign goods which are at cheaper prices by imposing high tariffs on imported goods and subsidizing the prices of goods; these measures theoretically help to create market for local goods and in turn benefit the domestic economy. When government imposes such restrictions as restricting importation of goods and also subsidizing the prices of local goods plus subsidizing the prices of exports in a way it will provide market for the domestic goods however the quality production will be reduced. This is because the level of competition will reduce and companies will rely on old technology to manufacture goods unlike when there is competition from foreign goods.
Protectionism also affects the citizens of a particular country since they will lack the freedom of choosing a variety of commodities since they will be forced to rely on those that are available. Costs inflation of goods will also be incurred since companies may tag high prices of their goods since the citizens won’t have any other choice to go for.
In summary protectionists believe that protectionism helps to protect employment for local citizens and also encourage the individual companies to hire domestic workers. They also believe that protectionism protects a country from the open market while it is growing. However, this only happens theoretically since in the practical world protectionism never works.