Protectionism

Thesis: Protectionism refer to government policies and the actions that restrains and restricts international trade via tariffs and quotas. Its intention is protecting the economy by reducing imports and controlling foreign product. However, the outcome does not turn out like the primary purpose. Not only does it not reduce the unemployment rate and enhance economy, protectionism tend to provoke the international tread war also.

I. the short-term, protectionism is possible to relieve the unemployment rate, however, in the long-run every outcome is opposed.

1. Protectionism argument is often presented to restrict free-trade. Overall free-trade does not reduce the available domestic jobs
2. The job preservation is often claim by labor unions to save their jobs. this action will reduce jobs demand due to higher-cost of labor and resources.
3. Example in the U.S. steel industry, labor and corporation collaborate to restrict imports in order to boost labor benefits and corporate earnings. This policy make the U.S. steel industry underwent the serious unemployment

II. Trade war can be created when protectionist country raises tariffs on another Countries’ imports.  The foreign Country will react by impose the taxes also.

1.  trade war that begins in one sector is able to affect other sectors, a trivial start can quickly worsen into a larger multinational disagreement.
2.  The remarkable instance of trade war can be seen in the U.S. protectionism targeting Indian outsourcers. India responded the U.S. policy by reconsidering their outsourcing services in the U.S, and shifting it to multiple locations worldwide

III. Consumer dissatisfaction from low quality product is the other disadvantageous effect of protectionism.

1. Protectionism is more likely to force consumers to expend their money more than the actual products’ price. When customers are limited their liberty to access and choose their desired product; it will reduce people's living standards.
2. Trade between nations sound more reasonable to improve the quality of life by allowing each person to access to any commodities that he or she preferred.
3. The absence of trade barriers will encourage manufacturers to face greater competition. This increased competition urges them to keep their product prices low and improve the product quality. Finally, Consumers are able to spend less money.

IIII. Certain arguments often demonstrate the countries that impose this protectionism policy to nurture infant industries.

1. This method gives infant industries the valuable time to learn how to efficiently produce the goods, and master their competitive skills in production process.
2. The temporary protection or protectionism is able to control the low-cost foreign producers and enable the domestic companies sustain themselves
3. The U.S. Government enacted the temporary 30% steel tariffs to protect U.S. steel companies from dumping. This make steel manufacturers respond by attempting to get the competitive skills in order to save all upstream and downstream industries.

Conclusion: Protectionism is only good in certain cases, but overall it causes a lot of economic problems. Protectionism could chiefly be obstacle of economic improvement. Ideally, the most benefits from market can only be gained when barriers to trade are opened as much as possible and the state does not impose any limitations to trade.