Should Trade Protectionism be allowed?

October 5, 2010 § 1 Comment

That’s right, it is certainly a hard question to solve with a simple yes and no. Many countries lean toward free-trade, while others impose protectionism such as tariffs, quotas, and subsidies to protect domestic industries. Understanding there exists pros and cons to this argument, I must say that I agree to have free-trade with these reasons:

  1. Protectionism increases price and decreases options. Protectionism limits availability of imported goods that force consumers to purchase domestic goods at a higher price. This is because the consumers have to cover the cost for protectionism with expensive prices for foreign goods.  On the other hand, prices are kept low and have more goods to choose from when there is free trade because competition levels increase amongst producers world-wide.
  2. Trade Wars may breakout. If a country restricts the amount of imported goods into one country, the countries may have tension in between them. For example, Japan and the USA were fighting over resources during WWII. USA was trying to avoid the war until Japan attacked Pearl Harbor and provoked USA to have war. The ultimate reason to this had to do with Japan blocking goods and trade between the two countries.

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§ One Response to Should Trade Protectionism be allowed?

  • julieeconblog says:

    I think you have similar ideas as me! I do agree that protectionism can keep prices low and can evoke trade wars among countries.

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