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  1. Engineering exports may slip by about $5 billion from the $90 billion target set due to increased protectionism in the U.S. and Europe, officials at the “Engineering Export Promotion Council” (now EEPC India), Chairman said.
  2. Protectionist measures taken by countries like the US would provoke other regions such as Europe and China into taking retaliatory steps, which would further dent exports from India.
  3. Certainly the move by the US would impact Indias engineering exports, maybe not directly but indirectly. The price movement of products would become volatile now.
  4. The US has imposed a duty on steel and aluminium on India and China.

Trade Protection Options


  • tariffis a special type of tax that is imposed on imports.
  • Tariffs increase the price of imports, which helps protect domestic industries because the imports become more expensive than locally produced products.

Import quota :

  • It limits the quantity of specific products that can be imported into the country during a specific period of time.
  • Sometimes import quotas are absolutely fixed. However, sometimes an exporting country can pay extra tariffs for imports that exceed the quota.

What is Trade protectionism?

It is a policy aimed at restricting imports of foreign goods into a country for any of the reasons:

  1. To balance country’s balance of trades by reducing imports.
  2. To increase Exports by developing more profitable and cometetive industries.
  3. In order to accomplish the second goal, one needs to protect the domestic industries from imports that will hinder their growth.

Advantages and Disadvantages

The policy of trade protectionism has some obvious advantages.

  1. Restricting imports helps her country’s domestic economy develop new industries that might otherwise be quashed by imports from other countries that have had a head start.
  2. These developing industries can add to the country’s economic growth, create jobs, increase the overall wealth of the country and lead to a better balance of trade.

But, trade protectionism does have disadvantages.

  1. Trade protectionism is not efficient from an economic standpoint.
  2. It’s more efficient under the concept of comparative advantage for a country to focus its production on those goods for which it has an advantage in production and import those goods that it does not.
  3. Consumers in the domestic market may also have to pay a premium for a better produced import or be denied the ability to acquire it at all. This may reduce the standard of living of the citizens of the country.
  4. Additionally, the Golden Rule often applies in international trade: Countries subjected to trade protectionism may retaliate by raising trade barriers.