Free Trade vs Protection

Whether or not trade protection is considered necessary depends on the economic and political beliefs of the policymaker/government. This is because there are many valid points in both advantages and disadvantages. 

• Trade protection measures will benefit domestic producers, as they can supply more at a higher price. Their surplus and revenues increase.

• Domestic consumers do not benefit, as they will have to pay more for less choice. Their surplus decreases (expenditure change depends on price elasticity). Hence, their standard of living may decrease.

• However, producers and consumers are not entirely different entities. Producers supply salaries, and when they are outcompeted by international firms, many consumers may become unemployed.

• Should governments prioritize their domestic firms over the benefit of the world? There is no real correct answer and some proper evaluation is great for paper 1.