a clean environment for jobs. Some politicians worry that their country may become overly dependent on key

imported products, like oil, which in a time of war could threaten national security. All of these fears influence

governments to reach the same basic policy conclusion: to protect national interests, whether businesses, jobs,

or security, imports of foreign products should be restricted. This chapter analyzes such arguments. First,

however, it is essential to learn a few key concepts and understand how the demand and supply model applies

to international trade.

20.1 Protectionism: An Indirect Subsidy from Consumers to Producers

LEARNING OBJECTIVES

By the end of this section, you will be able to:

• Explain protectionism and its three main forms

• Analyze protectionism through concepts of demand and supply, noting its effects on equilibrium

• Calculate the effects of trade barriers
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