Free Trade Vs. Protectionism

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Free Trade vs. Protectionism
A major debate between economists is whether and economy should have free trade or protectionism for their companies. Supporters of free trade believe in opening the global market, with as few restrictions on trade as possible. Supporters of protectionism believe in concentrating on the welfare of the domestic economy by limiting the open-market policy of the United States. However, what effects does this policy have for the international market and the other respective countries in this market? The question is not as complex as it may seem. Both sides have strong viewpoints representing their respective opinions, and even the population of the United States is divided when it comes to taking a stand in the issue. Those who favor free trade think that an open trading system with few limitations and little government involvement is best. On the other hand, those in favor of protectionism believe that governments must take action to regulate trade and subsidize industries to protect the domestic economy.
In theory, completely free trade would provide the most goods and services at the lowest possible costs. However, the competition that free trade brings to domestic industries may result in unemployment and slower growth. Therefore the argument that protectionism is desirable because it protects domestic jobs by compensating for foreign firms use of inexpensive labor is very powerful in developed nations. Protectionism also argues that new infant industries often must be protected to give them time to grow and become strong enough to compete internationally. Other arguments hold that any industry crucial to national security, such as the producers of military hardware, should be protected. Protectionism also may promote diversification of the economy.
One of the most important tools to manage countries international trade position is the tariff, a tax on an import. It has the effect of making the item ...