Protectionism in a Globalized world

Like a volatile, unaccommodating, and selfish sulky kid, protectionism is opposed to the openness, integration and acceptance to new ideas, as is promoted by globalization. With all the bally-hoo about Protectionism, I though I'd write my first WSO post on the lines of it. In the increasingly globalized world characterized by free trade flows, integration of economies, spread of ideas, culture and technology, protectionism seems like an oddball. A protectionist policy aims to shield the economy of a country, preventing the flow of goods and services, or at least penalizes the incoming excesses.

Of the measures used to curb the flow of imports, Tariffs and Quotas happen to be popular tools of economic policy. A tariff levies a penalty on goods at the point of entry into the country, thereby making the good more expensive to import. On the other hand, a Quota is a limit on the quantity of a particular good which can enter the country.

The restrictive policies are a double whammy, as they hurt not only the country from where the goods are exported (by buying less from them) but also dent the home economy because the goods bought are either expensive, or unavailable in the economy, and new domestic manufacturing, which is incessantly more expensive will take place, thereby fuelling inflation. But why at all are these measures taken? after all, isn't everyone better off by allowing free cross-border movement of goods, by buying goods from countries which can produce and sell them cheaply, and selling off local surplus so as to generate profits? Though curbing imports is inflationary, at times restrictive policies become necessary in order to nurture the nascent domestic producers of the good, which otherwise would crack under hypercompetitive pressures from outside goods. The Globalization argument on the other hand helps the existing firms become more sturdy and competitive, creating a "survival of the fittest scenario" where incompetent firms are forced to shut shop and perish if they are unable to differentiate or create a cost advantage. Free trade theorists argue that though imports cost jobs, exports create new one in its place, while keeping prices competitive and allows everyone to gain in the longer run.

As for the ongoing US-China trade wars, which has become a round of attack and counter-attacks as each country imposes tariffs on the other, firms in both economies are being hurt due to rising cost of inputs in the U.S. and slowing investment activity in China. The fruit borne by these actions is ambiguous as of yet, but both countries seem resolute and unwilling to back down from their respective stances.