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.
Recent examples of protectionism are typically motivated by the desire to protect the livelihoods of politically powerful groups, such as farmers in the United States and European Union, who in the absence of tariffs might be unable to compete with lower-cost foreign producers. Most economists view this form of protectionism as a disguised transfer payment from consumers (who pay higher prices for food or other protected goods) to local high-cost producers.
It is the stated policy of most First World countries to eliminate protectionism through free trade policies enforced by international treaties and organizations such as the World Trade Organization. Despite this, many of these countries still maintain tariff barriers to protect some favored industries, and the elimination of such barriers remains a contentious political and diplomatic issue.
See also: the Candlemakers' petition, a satire of protectionism.
