Protection. The term is familiar to everyone: those who have protection enjoy advantages that are not available to everyone else. This kind of favoritism is considered wrong and unjust in everyday terms, yet it is a recognized trend in economic policy as well.
Protectionism is an economic approach that favors domestic production and economy over foreign trade.
Protectionist measures complicate the import of goods from foreign countries. This strengthens and shields the economy from external influences. The most commonly used tools of domestic market-protecting economic policies are tariffs, embargos, special taxes, quotas, and other regulations that restrict imports. Protectionist measures are currently being implemented, and new regulations by U.S. President Donald Trump could even lead to a trade war. But why is it important to know about this, and how does it affect the lives of everyday people? Read on!
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Protectionist policy today
In recent years, numerous events have facilitated the rise of protectionism worldwide. Since 2021, the United States has implemented various tariffs on imports from China to support local industry. While these measures benefit domestic manufacturers, they have made various products more expensive for many American consumers.
So, what is currently happening in America? Donald Trump previously promised to impose tariffs on products coming from Canada, China, Mexico, and likely the EU as well. Experts had long feared that this could lead to a trade war, and recent events indicate that this may indeed come to pass, as both Canada and Mexico have announced tariff regulations against the USA. According to Sky News, Canada is imposing a 25 percent tariff on a total of 155 billion Canadian dollars worth of American goods. Meanwhile, the Mexican president has instructed the economic minister to implement both tariff and non-tariff measures to protect Mexico’s interests.
Why Mexico and Canada? The Trump administration opted for tariffs to stop the spread of fentanyl and to limit immigration into the United States. The three prime ministers agreed to take steps to strengthen border security and curb drug trafficking; therefore, the American president has suspended the implementation of the 25 percent tariffs on Canadian and Mexican imports for 30 days. However, this does not mean that the tariffs will be eliminated, so we must be prepared for all eventualities.
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The European Union is also taking steps toward protectionist policy, primarily for environmental purposes. The EU’s “Fit for 55” package aims to reduce greenhouse gas emissions and seeks to achieve environmental goals by supporting local industry. Alongside green policies, protecting domestic markets plays an important role.
Protectionist measures are also a consequence of the Russia-Ukraine war. Ukraine is a significant agricultural producer, and the war has led to a global increase in agricultural product prices. Simultaneously, many countries have implemented protectionist measures to safeguard local supply from rising prices and fluctuations in international markets.
How does all of this affect You?
Protectionist policy directly impacts all of our lives, as it influences our income, expenditures, and overall livelihood. The prices of products subject to protective tariffs rise, which we feel in our wallets. At the same time, the preservation of local jobs and the strengthening of domestic industry mean that for many, protectionist policy represents job security. This is especially important during periods of volatility in global markets.
Summary
Protectionist policy is currently a highly relevant topic that profoundly affects both the global economic environment and local communities. Measures taken to protect local industry, preserve jobs, and strengthen economic independence can also have adverse effects, such as higher prices for consumers and trade tensions for producers.
Global political events, such as the post-COVID-19 economic situation, the consequences of the Russia-Ukraine conflict, and the fight against global warming, may all lead to an increase in protectionist measures. For everyday people, this topic is not merely theoretical; economic decisions directly impact their wallets and livelihoods. Therefore, it is vital to actively monitor market protection measures and understand their effects. The future will reveal how well countries can balance local interests with the challenges of global trade.