Protectionism

Protectionism is the use of government measures, such as tariffs, import quotas, subsidies and regulatory barriers, to protect domestic producers from foreign competition. Supporters present it as a way to preserve jobs, nurture new industries and safeguard national security.

It has a long history in the United States. Alexander Hamilton's 1791 Report on Manufactures argued for protecting infant industries, and high tariffs were a pillar of the Republican Party in the nineteenth century, and of the "American System" of Henry Clay. After 1945, the U.S. led a shift toward liberalized trade. Recent decades have seen a revival, with tariffs on steel and aluminum and on goods from China, with bipartisan support for some measures.

Economists generally argue that protectionism raises prices for consumers and inputs for downstream industries, invites retaliation and protects inefficiency, and that jobs saved in a protected industry come at a high cost per job. Supporters answer that comparative-advantage models ignore national security, the loss of manufacturing capacity and communities, and unfair practices such as subsidies or dumping by other countries. Debates cut across party lines, and compare with free trade and the trade deficit.