Economics Protectionism Questions
The main arguments for protectionism in the automotive industry include:
1. Protecting domestic jobs: Protectionist measures such as tariffs or quotas can help safeguard domestic employment by limiting foreign competition and ensuring that local workers are not displaced by cheaper foreign labor.
2. National security concerns: Protecting the automotive industry can be seen as crucial for national security, as it ensures the availability of a domestic supply of vehicles and related technologies in times of crisis or conflict.
3. Infant industry protection: Protectionism can be justified as a temporary measure to nurture and develop domestic automotive industries, allowing them to grow and become globally competitive before facing international competition.
The main arguments against protectionism in the automotive industry include:
1. Higher costs for consumers: Protectionist measures such as tariffs can increase the prices of imported vehicles, limiting consumer choice and potentially leading to higher costs for consumers.
2. Inefficiency and lack of competitiveness: Protectionism can shield domestic automotive industries from international competition, which may result in complacency, lack of innovation, and reduced efficiency. This can hinder the industry's ability to compete globally.
3. Retaliation and trade wars: Imposing protectionist measures in the automotive industry can provoke retaliation from other countries, leading to trade wars and potentially harming overall economic growth and international relations.