Protectionism means that a country has laws or other rules that make it easier for their own products and brands to sell by making goods from foreign countries more expensive or harder to get.
For example, if farmers from Argentina are selling wheat at a lower price than French farmers are, French people would buy more wheat from Argentine farmers than from French farmers, and French farmers would not get so much money.
The benefits to protectionism is that some people in a country would make more money because they would be able to sell things at higher prices, but on the other hand, other people would lose money because they wouldn't be able to buy the things from other countries that sell them cheaper.
Many protectionists (people who believe in protectionism) support big tariffs (taxes on a trade involving a foreign country) because the government can get a lot of money from the tariffs.
When a country raises a tariff on another country, usually the other country raises their tariffs on that country to get even. This is called a trade war.
Tariffs were popular in the United States during the 1800s, but when the United States made the Hawley-Smoot Tariff a law in 1930, it raised tariffs very high on Europe. In response, Europe raised its tariffs on the United States, which resulted in a trade war. Many economists and historians believe that the tariffs made the Great Depression worse.
Protectionism is no longer popular now. Instead, people support free trade (the opposite of protectionism where the government makes it easier for the country to trade with other countries). Free trade is favoured by right-wing parties.
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Other websites Edit
- What is protectionism? at wisegeek.com