business environment

Protectionism – It is the government actions and procedures that restrict particular bases of international trade, it is to develop industries and firms domestically by protecting them from other nation competitors through tariffs, quotas, subsidies imposed on the trade whereby they import products. There are several advantages of protectionism in a nation likewise protectionism helps a nations trade to be restricted the unwanted goods and helps them increase in the total revenue of a nation’s economy. It also increases jobs for domestic workers as it is protected by several kinds such as tariff, quotas and subsidies. Protectionism keeps the domestic economy of a region flowing as in it decreases the number of exports and increases the revenue of an economy and has an increment is the total gross domestic product as firms will be more efficient in building their own products. Protectionism allows the domestic firms to fix price decently rather than competitive pricing at a high price where consumers cannot afford to buy as there are no rivalries / competitors from outside nation to compete. Protectionism consists of huge disadvantage such as the protectionism doesn’t allow to trade at a unlimited level where the domestic firms cant expand globally easily and grow their firms in other regions by passing on their present production processes to other nations.

Methods of protectionism -:

a) Tariff – It is a tax imposed on the imported goods and services. It is basically used to restrict trades; tariff is indirect revenue to the government. The government imposes tariff to gain more of revenue and to restrict trade, tariff helps indirectly to the competitors based in the region as it reduces the number of i...

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...mployment growth as more firms are invented globally the more employees are needed for the specific firm to work. Free trade even allows the national economic growth to increase rapidly as per firms are built in to work out and provide more of services and goods in the region with trading around the specific nation even increases the GDP for that particular nation. Free trade has few disadvantages such as free trade allows unlimited trade between countries where it would be a mess without any revenue to the nation, despite the number of competitors of a specific product increases as in consumers would look into more of imported goods thinking that is better and it would lead to conflicts between competitors. Free trade could lead to pollution / diseases effects as other nation’s products and services which are not suitable for the specific nation might be passed on.