Question

what are the negative effects of protectionism and tariffs on imported goods and how does this affect the welfare of a nation?

try to be as detailed as possible

Answer 1

Protectionism is the economic policy through which every country becomes a deterrent to other countries. Imported goods from other countries are charged more for this. Importation is discouraged by other means. Governments adopt this policy to promote the business of their country.

he negative of protectionist policies are as follows.

Protectionism undermines the foundation of national production in the long run, as it reduces the pressure from the global market to develop entrepreneurial initiatives. Routines, unwillingness to participate with acquired privileges and gain progress according to status, take the upper hand for the desire for innovations. The determination to surround itself with protectionist barriers is often determined not by national economic interests, but by the pressure from powerful private interests practiced by political and parliamentary circles.

Protectionism is harmful from the consumer's point of view, which forces him to pay more for the goods and services he needs, and not only for imported goods that are subject to customs tax, but also for trade with the national border tax Also for the subject, whose release and sale is linked to a non-competitive pricing system.

Protectionism creates a chain reaction, as some industries will need to be protected, sooner or later, to protect others.

The fencing of national industries by foreign competition eventually leads them into a protectionist trap, because if crutches were issued to strengthen such industries, it is quite difficult to keep them without risk of collapsing. Thus, protectionism initiated as a temporary measure can become an integral part of long-term national economic policy.
Under protectionism, sectors of the national economy, protected by its constraints, lose their impetus for development, as the mechanisms of competition are dying, and the ability to maintain income and monopoly privileges destroys the desire for progress and innovation .

Conservative policies intensify inter-state rivalry and pose a potential threat to international stability and security. It weakens the relations of interdependence between countries, prevents the development and intensification of the international division of labor, the production and cooperation of expertise and cooperation, at the same time giving rise to hostility and mistrust of each other.

Protectionism is rooted in a certain irrationality: aiming to achieve a positive trade balance, protectionism inhibits import actions. This causes a similar reaction from international partners, resulting in reduced volume of export operations, and the situation leads to imbalances in the trade balance, not to a positive balance.

Under protectionism, sectors of the national economy, protected by its constraints, lose their impetus for development, as the mechanisms of competition are dying, and the ability to maintain income and monopoly privileges destroys the desire for progress and innovation .