What is protectionism?

📘 Briefly explained Protectionism refers to a state’s economic policy strategy of protecting its own economy from foreign competition. To this end, trade barriers such as tariffs, import quotas or subsidies for domestic companies are used. The goal is to strengthen domestic production and employment and to reduce dependence on foreign goods. However, protectionist measures generally make imported goods more expensive and can trigger retaliatory measures from trading partners. This creates the risk that international trade will decline overall and that welfare losses will occur. Protectionism is therefore an instrument of isolation that can protect individual sectors in the short term but often causes macroeconomic costs in the long term. 🔍 Why this matters Protectionism refers to a state’s economic policy strategy of protecting its own economy from foreign competition through trade barriers. Typical instruments are tariffs, import quotas, subsidies for domestic pro …