Governments implement skewed economic policies under the pretext of protectionism. But such policies do not protect businesses, industries or consumers. They only serve to meet government objectives and are not in the best interest of citizens.

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Protectionism:
The Greatest Irony of Economic Policy
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Why is it Most Relevant Today?

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• Protecting a country’s domestic industries from foreign
competition
• The shielding is achieved by restricting imports
• Imports are restricted via tariffs, quotas and various government
regulations
By definition, Protectionism is the economic policy of:
What is Protectionism?

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Between May and October 2018, the G20 countries:
• Levied 40 new trade restrictive measures
• Impacting trade worth ~$481 billion
• Covering 6X more trade than in the previous period
• Averaging 8 new trade restrictions per month
• Constituting the highest tariffs since WTO began monitoring
G20 trade
According to the WTO (World Trade Organization)
Why is This Most Relevant Today?

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Argentina
Australia
Brazil
Canada
China
The G20 countries comprises the world's biggest economies.
The G20 Countries
Republic of Korea
Japan
Mexico
The Russian Federation
France
Germany
India
Indonesia
Italy
G20
South Africa
Turkey
The United Kingdom
The United States
The European UnionSaudi Arabia

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The situation constitutes:
• A grave concern for the whole international community
• An increase in economic risks
• Potential effects on growth, jobs and consumer prices
• A threat to global economic recovery
According to the WTO (World Trade Organization)
What’s the Impact of These Restrictions?

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• Impose significant costs
• Are paid by domestic businesses (and NOT by any other country)
• Raise the price of goods for your citizens
• Serve political objectives, rather than economic ones
So, whom are they protecting?
Trade tariffs:
Does This Sound Like “Protection”?

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• $80 billion a year
• More than $1,200 per family
So, trade restrictions penalize domestic consumers and, therefore,
don’t “protect” them.
Trade restriction serve as a tax on domestic consumers. According to
the Institute for International Economics, trade barriers cost
American consumers:
Does This Sound Like “Protection”?

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• More prone to higher raw material prices and supply disruptions
• Less likely to implement measures to improve their efficiency and
management
• Hesitant to invest in innovation to continuously improve their
offering to consumers
• Increasingly dependent on government support for their survival
So, trade restrictions make domestic business weaker and, therefore,
don’t “protect” them.
Trade restrictions make domestic firms:
Does This Sound Like “Protection”?

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Slowdown in
Global Economic
Growth
Decline in
Global
Trade
Trade
Restrictions• For 2018, estimates have been reduced from
3.9% to 3.7% (IMF)
• For 2019, estimates have been reduced from
3.7% to 3.5% (OECD)
Amid prolonged trade disputes and import restrictions, global
economic growth is expected to decelerate.
The World Suffers

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Zooming Out of the Domestic Economy

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Did Protectionism Actually “Protect” Anyone?

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Read More About Free Markets
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