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Methods of restraining international trade in order to help protect local businesses from foreign competition.
This is a tax on imports.
This is a physical limits on the quantity of imports
This is a total ban on a good, this may be done to stop dangerous substances
If a governmentt subsidises domestic production this gives them an unfair advantage over competitors.
Making it more difficult to trade, e.g. imposing minimum environmental standards.
Can cut the value of the currency to make it more competitive
Benefits of Protectionism
- Infant industry argument – protect new industries
- Diversify the economy – help develop new industries to give more diversity to economy
- Raise revenue
- Protect certain key industries from international competition to try and safeguard jobs.
- Protect domestic jobs which are threatened by rise of imports.
- Other countries may retaliate by imposing their own import tariffs thus making it harder to export
- Countries may be specialising in a good that don't have a comparative advantage thus may be innefficient