Question

Rising protectionism, as evidenced by the recurring escalations of US-China trade tensions, is a feature of the contemporary global trade landscape. What are some current examples to support the pros and cons of protectionism?

Answer 1

Protectionism is a common trade policy to protect domestic firms against global competition. Protectionism is practiced frequently by many countries in order to give added advantage to their domestic industries to flourish which would not get a chance to develop if they are not shielded from foreign competition.
Protectionism as a trade measure has short term gains and boosts the local markets and is a boon for start ups and emerging businesses as well it is an added earning for the governmrnt in the form of tariffs and quota permits. It helps to reduce economic inequality to a certain extent as domestic supply side becones stronger and more self sufficient to fulfill domestic demand creating more job opportunities and higher productivity in the economy.
Protectionism might seem a very useful tool in the short run but it has its shortcomings. It raises the price of goods as free market is not allowed to function under protectionism thus distorting the prices. Such measures can reduce either the quantity or quality of products purchased by consumers by limiting the choices available for consumers in the market. Such measures also hamper trade relation between countries since if one nation imposes such measures that will automatically influence the other nations to follow similar trade patterns.
In the present day world there are tensions in trade relations between US and China since US imposed Trump tariffs on imports from China and China reacted by imposing tariffs on agricultural imports from US. Such trade wars are inevitable in the light of protectionism being implemented.
Other counties or associations which impose such measures are EU, Argentina to name a few. WTO allows anti dumping tariffs which are imposed by a country when a firm sells a certain commodity below its minimum price in the market thus unfairly capturing the market by eliminating donestic competition. Such tariffs are supported by WTO but it discourages other protectionist tariffs.