4.1.4 Protectionism

• Protectionism refers to government actions that limit international trade to shield domestic industries from foreign competition
• Protectionism aims to promote domestic production and employment.
• One reason for protectionism is to protect domestic employment
• Reasons for protectionism in order of importance:

  1️⃣ Protecting domestic employment

  2️⃣ Safeguarding infant industries

  3️⃣ Preventing dumping

  4️⃣ Improving balance of payments

  5️⃣ National security concerns
• Safeguarding infant industries is a reason for protectionism.
• Tariffs are taxes imposed on imported goods
• Protectionist measures aim to reduce dependency on foreign goods.
• Protectionism limits international trade to shield domestic industries.
• Match the protectionist measure with its example:

  Tariffs ↔️ USA charges 25% tariff on imported steel

  Quotas ↔️ EU sets a quota of 500,000 tons for beef imports

  Subsidies ↔️ UK subsidizes renewable energy companies

  Non-tariff barriers ↔️ France requires imported foods to meet health standards
• The USA charges a 25% tariff on imported steel
• The EU sets a quota of 500,000 tons for beef imports.
• France requires imported foods to meet specific health standards
• Protectionism can help safeguard infant industries.