From a broader and more far-reaching perspective, protectionism as a general principle has been

heavily criticized (even in infant industry situations). The reason for this is quite simply the significant
jump in prosperity as international trade expanded, and the huge capacity for specialization, economies
of scale, technology sharing, and a host of other advantages that have been a direct result of free global
markets. The problem still remains, however, that this prosperity is often unregulated and of the
greatest benefit to the influential players in established economies, sometimes at the expense of
exploitation of developing nations (cheaper labor, reduced governmental oversight, etc.). As a result of
this, protecting infant industries can benefit the nation employing them, but generally with the
opportunity cost of global value.

Inefficiency of resource allocation in the long run - the imposition of tariffs, or other protectionist
measures, in the long run results in losses of allocative efficiency. Protected producers are not exposed
to international competition,do not have enough incentive to decrease costs or innovate and, in the
long run, become less competitive and fall behind the rest of the world. Protection gives shelter to weak
home industries. If it is permanent, home industries would not get any incentive to compete freely with
their foreign counterparts. There would be need for continuation of protection for an indefinite period.
In addition, tariffs increase prices in the domestic market and distort the price signals directing
investments towards inefficient industries.

Downward multiplier effects - if a country protects against imports, this will reduce the exports of other
countries and their aggregate demand and national output. Consequently, they will import less as the
level of imports is a function of national income level. This process could continue and result in a
decrease in world production and income.

Retaliation - protectionist measures tend to be met with some form of retaliation. This will mean that
any success in protecting against imports is likely to result in a fall in exports.

Loss of allocative efficiency (welfare loss) in the short run - a tariff leads to a reduction in imports and
increases the price. There is a loss of consumer surplus (part of consumers' welfare shown as areas A, B,
C and D in the diagram below). Some of the welfare loss is transferred to the government (tariff revenue
shown as area C), and some to producers (shown as area A). There is also welfare cost to society (loss to
consumers that is not transferred to anybody else) represented by areas B and D.
Owing to higher tariff on imports, the consumers are compelled to buy home goods, often of inferior
quality and often at higher prices,

Protection may lead to trade wars and international conflicts among trading nations,

Protection give rise to such abuse as ‘wire-pulling’ in political quarters, vested interest in the protected
sector, etc.