According to Protectionism

(Protectionism) also reduce trade and adversely affect consumers in general (by raising the cost of imported goods), and harm the producers and workers in export sectors, both in the country implementing protectionist policies and in the countries protected against

How does protectionism harm the producers and workers in export sectors in the country implementing the protectionist policies?


1 Answer 1


Several channels I could think of:

  • As you said, protectionist policies tend to raise the cost of goods that could previously be imported. If these goods are intermediaries for the export sector, the firms in those sectors would be affected. This is the most direct channel I could think of.
  • You could also argue that the other countries will respond to the protectionist policy by imposing their own protectionist policies, which would eventually hurt the exporters. Think of US agricultural product exporters who got hurt as a result of the US' first imposing tariffs on Chinese exports through China's retaliatory tariffs.
  • In the longer run, protectionist policies keep firms without comparative advantage in business. Of course, there's an argument of "infant industry" who needs protection... but aside from that, without such policies, the resources employed by these "sunset industries" could be diverted and used more productively elsewhere.
  • $\begingroup$ I'll just add that you can safely argue the "infant industry" point is only a defense of limited, targeted protectionism that ends in the short- to medium-term. $\endgroup$
    – heh
    Oct 22, 2019 at 18:14

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.