Pros and Cons of Protectionism

Pros and Cons of Protectionism

Protectionism is the process of shielding local industries from foreign competition. This can be done through enhancing border security, carrying out import inspection, and use of product subsidies.

The main goal of protectionism is to enable local industries to succeed by increasing the prices of imported products.



1. Protects new industries: Protectionism enables newly established businesses to grow. It protects domestic industries from the competition in the international market.

2. Encourage Local job growth: Protectionism prevents outsourcing of cheaper labor from the international market. This ensures local workers are able to get high paying jobs and contribute to the growth of the economy.

3. Enhance national security: Policies based on protection of domestic industries ensures borders are more secure. This makes it difficult for those with malicious motives to carry out their plans. Open borders also invite a lot of security concerns.

4. Government revenue: Tariffs imposed on domestic products can be used to generate revenue for supporting government projects.

5. Reduce economic gap: It ensures there is a reduced gap between the rich and the poor. The free trade on domestic products ensures there is equality although people with more money are going to benefit the most.

6. Correct Imbalance: Tariffs imposed on products helps correct imbalance in the production process. If a country subsidizes its products and another country does not, then a tariff is used to correct the imbalance.

7. Reduces national deficit: When a country introduces protectionism, consumers will prefer more locally produced goods rather than imported products due to cost comparison. Reduced imports limit national deficits on traded goods.

8. Create a sense of patriotism: Protectionism enables people to work together and can bring a sense of patriotism. When people work together, they have a lot of pride in what they do.



1. Limited choice: If free trade policies are allowed in a country, customers will have a limited choice of products and services. They will only be able to rely on locally produced goods. If foreign goods are imported, they will be sold at higher prices and only a few will be able to afford them.

2. Increase price: Increased completion results I reduced prices and quality products. Eliminating competition may lead to increased prices of domestic products as businesses increase the prices of commodities to match the prices of foreign goods.

3. Create short-term gains: If a country announces tariff changes in trade, other countries often follow suit. This leads to short-term gains. The tariffs can also affect business will specialize in imports since the prices are high.

4. Educational deficiencies: Protectionism limit immigration and visa approvals and this create service gaps in the economy. In the US, immigrants fill highly skilled jobs since there is a domestic shortage of highly skilled workers. They don’t have qualified domestic workers in science and engineering fields.

5. Devastate domestic economy: If protectionism trade policy is not properly implemented, it can lead to the devastation of the economy.

6. Causes inflation: Removing competition from the global market lead to increased wages and prices and this leads to inflation.

7. Loss of jobs: Protectionism leads to loss of jobs that rely on the internet due to barriers from the free movement of capital and the labor cost goes up.

8. Reduced quality and quantity of products: Influence of tariffs reduces the quantity of products produces. Industries can also lower the quality of locally produced goods due to reduced competition from the international market.

9. Business depression: Ending protectionism in business often leads to business depression due to increased competition from the international market and change of customers taste and preferences.

10. Influence warfare between countries: Protectionism can lead to a trade war between nations since there are few opportunities for the nations to help each other. Countries are likely to go to war with each other if their economies are independent.

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