Microeconomics › Section T · Globalization and protectionism › Topic T.1
Protectionism as a hidden subsidy
Restricting imports looks like taking sales from foreigners and handing them to domestic firms. Demand and supply show something less visible: the money comes mostly from domestic buyers, through higher prices, and some of it simply disappears.
In this topic
- What protectionism is
- Quotas and nontariff barriers
- The model: a small importing country
- Four areas on the diagram
- Worked example: an import quota
- Worked example: tariff or quota?
- A subsidy paid at the till
- Evidence from recent tariffs
- Effects in the exporting country
- Common mistakes to avoid
- Key takeaways
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