Which of the following can be described as an example of trade protectionism?

Which of the following can be described as an example of trade protectionism?

• A. Eliminating tariffs on imports
• B. Imposing quotas on imported goods
• C. Entering into free trade agreements
• D. Encouraging foreign investments

Answer: (B)

Trade protectionism refers to government policies that restrict international trade to help domestic industries. An example of this is imposing quotas on imported goods. Quotas limit the quantity of a particular product that can be imported into a country during a specific timeframe. By doing so, governments aim to protect local producers from foreign competition, ensuring that domestic industries can thrive by limiting access to foreign goods. The other options represent practices that generally facilitate trade rather than restrict it. Eliminating tariffs on imports makes foreign products more competitively priced and accessible, encouraging imports rather than protecting domestic industries. Entering into free trade agreements promotes trade between nations by reducing or eliminating trade barriers, allowing for greater market access. Encouraging foreign investments often leads to an increase in international economic activity and openness rather than protectionism.

Trade protectionism refers to government policies that restrict international trade to help domestic industries. An example of this is imposing quotas on imported goods. Quotas limit the quantity of a particular product that can be imported into a country during a specific timeframe. By doing so, governments aim to protect local producers from foreign competition, ensuring that domestic industries can thrive by limiting access to foreign goods.

The other options represent practices that generally facilitate trade rather than restrict it. Eliminating tariffs on imports makes foreign products more competitively priced and accessible, encouraging imports rather than protecting domestic industries. Entering into free trade agreements promotes trade between nations by reducing or eliminating trade barriers, allowing for greater market access. Encouraging foreign investments often leads to an increase in international economic activity and openness rather than protectionism.