Protectionism vs. Free Trade

20 flashcards comparing protectionism and free trade, focusing on definitions, ideologies, beliefs, goals, and reasoning.

Protectionism

An economic policy where a country restricts imports to protect domestic industries, often through tariffs, quotas, or regulations.

Free Trade

A policy that allows goods and services to move across borders without tariffs, quotas, or restrictions.

Tariff

A tax on imported goods, making them more expensive to protect local producers.

Trade Quota

A government-imposed limit on the quantity of a certain good that can be imported or exported.

Economic Nationalism

A belief that a country should control its own economy and prioritize local industries and workers.

Comparative Advantage

An economic theory that countries should specialize in producing goods they’re most efficient at and trade for the rest.

Protectionists' Goals

Shield domestic jobs, prevent industry collapse, reduce reliance on foreign countries, and promote local development.

Free Trade Supporters' Goals

Open markets increase efficiency, lower prices for consumers, and promote innovation through global competition.

Ideal Economic Outcome for Protectionists

Strong domestic industries, self-sufficiency, minimal unemployment, and limited foreign dependence.

Ideal Economic Outcome for Free Trade Supporters

A globally integrated market with each country specializing in what they do best, leading to cheaper goods and higher overall wealth.

Non-Tariff Barriers

Rules or regulations that restrict imports without using direct taxes.

Impact of Protectionism on Consumers

It can lead to higher prices, less choice, and sometimes lower quality due to less competition.

Impact of Free Trade on Workers

It may lead to job losses or wage stagnation due to competition from cheaper foreign labor or automation.

Countries Supporting Protectionism

Countries seeking to develop domestic industries, reduce foreign influence, or respond to economic crises.

Countries Supporting Free Trade

Economically developed nations with strong industries, trade alliances, or access to high-tech resources.

Trade Deficit

When a country imports more than it exports, often cited by protectionists as a problem.

Dumping in Trade

When a country exports goods at unfairly low prices to undermine foreign industries.

Role of Sovereignty in Protectionism

Protectionists argue that controlling trade protects national independence, security, and identity.

Political Groups Supporting Protectionism

Nationalists, economic conservatives, some labor-oriented leftists, and populists.

Political Groups Supporting Free Trade

Economic liberals, centrists, libertarians, globalists, and some conservatives favoring market deregulation.