Methods of Protection

Methods of Protection

  • Protectionism is the protect of domestic industries from foreign competition


  • Tariffs are taxes on imported products
    • The main aim of a tariff is to shift demand from imports to domestically produced products
    • They can raise revenue for the government, but also discourage domestic consumption
    • g. the EU have an external import tariff which encourages EU members to trade with each other, and not outside the EU.


  • This is a limit on a supply of a good or service, and can be imposed on imports or exports
  • They can be imposed on exports, for example if a developing economy wants to keep food in the country during a famine
  • More commonly they’re on imports
    • A quota would reduce the supply of a given good, which is likely to push up the price

Voluntary Export Restraint

  • This is roughly the same as a quota, but it’s a mutual agreement between the two countries to restrict exports
  • A country would restrict its exports in return for a similar limit being put on the exports of the other country
    • This would avoid more damaging import restrictions being imposed on its products.

Foreign Exchange Restrictions

  • Imports can be reduced by a government limiting the amount of foreign exchange is made available to those wishing to buy imported goods


  • An embargo is a ban on the export or import of a particular good, or from a particular country.

Red Tape

  • Time delaying bureaucratic can discourage imports, as it will make it more expensive for a firm to import their goods into a country

Other Measures

  • Quality standards can be imposed, which will likely increase the costs for foreign firms to import goods into the country
  • Imports could be reduced by favouring domestic firms over foreign firms, even if foreign firms are more efficient and cost less.