4) What Are The Advantages And Disadvantages Of Trade Protectionism?
Answer:
Protectionism basically refers to all those policies that try to impose such practices that protect local firms so that they hold some advantage over the foreign firms. Some advantages of the trade protectionism are:
- If a country’s local industry is not very strong, imposing trade barrier would make foreign goods expensive and this will provide a chance to the local firms to compete on the font of price.
- The increased duties result in tax revenue for the government
The primary disadvantages of protectionism are:
- The local firms are being protected and they are competing on price not the quality
- The artificial protection can work well for the products inside the country while it is of bright use when the products will be exported; it’s a false sense of security.
- The consumers will be denied an easy access to high characteristic products.
- It is against the principle of free markets.
There are no advantages to protectionism, it is destructive.
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