[Author’s Name]
[Institution’s Name]
Essay on Protectionism
Protectionism is the economic policy of promoting favored domestic industries through the use of high tariffs and other regulations to discourage imports. Historical variants of this policy have included mercantilism, a trade policy aimed at maximizing currency reserves by running large trade surpluses; and import substitution, a trade policy in which targeted imports are replaced by local manufactures in order to stimulate local production. Originally coined in the XVIII century by Adam Smith in his treatise "An Inquiry into the Nature and Causes of the Wealth of Nations".
Equalization of Costs
Some protectionist have favored the "scientific method of tariff making." It is intended to equalize the costs of production between foreign and domestic producers, and to neutralize any advantage the foreign producers may have over the domestic producers, in lower taxes, or cheap labor. This argument carries the spirit of fair competition. The counterargument that arose in this case was that, if costs of production are equalized by tariffs, then the very reason for international trade disappears..........
