Arguments in favour of trade protection

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Anti-dumping tariffs

Tariffs imposed by an importing country on goods dumped by another country to raise the price to pre-dumping levels

Means of overcoming a trade deficit

A trade deficit arises when the value of exports < the value of imports, which may create balance of payments difficulties. The use of tariffs and quotas restrict imports and therefore reduces the size of the trade deficit

Tariffs as source of government revenue

Many countries, especially developing ones, rely on tariffs as a main source of government revenues

Infant industry argument

An industry that just beginning to be set up is unable to compete in international markets against well-established firms that have experience and economies of scale, and must therefore be protected until they grow and "mature". One of the strongest arguments

National security

Countries want to be self-sufficient in production of defence goods when threatened, and so often protect industries related to defence goods

Diversification of developing countries

Many developing countries specialise in production\export of a narrow range of goods, with negative effects on their economies. Protection of a variety of industries can help them diversify

Health, safety and environmental standards

Such standards are essential for the protection of consumers and the environment

Protection of domestic jobs

This is a common argument, and refers to the idea that protection of industries allows domestic production to increase, thus creating additional domestic jobs, while loss of protection allows cheap imports to enter that force domestic firms to shut down thus leading to greater unemployment


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