Advantages of trade protectionism

• If sunrise firms producing new-technology goods are to survive against established foreign producers then temporary tariffs or quotas may be needed. • Foreign firms may receive subsidies or other government benefits. They may be dumping selling goods abroad at below cost price to capture a market. • • • Reducing imports improves the balance of trade. To protect the manufacture of essential goods. To protect declining industries from creating further structural unemployment.

Disadvantages Of trade protectionism:
• • • • • The customers are not able to get the competitive prices. Instead they would have to buy what the home industry is producing Quality of products suffers as there is no competition. Home industry gets extremely non-competitive. Trade protectionism is a great barrier for companies that are willing to expand to other countries and are stopped due to these barriers. Smuggling and other unfair means tend to get boost as people like smuggled better quality products.

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