- To protect against unfair trade practices by foreign producers.
- Pro Trade Restriction: Foreign firms may try to export their products at prices below marginal costs in order to drive domestic producers out of business and establish a world-wide monopoly.
Anti-trust action can't be brought against a foreign firm so import policy can serve a similar goal.
- Con Trade Restriction: In some cases, prices that are below domestic costs may not be below the costs of foreign producers who have developed more efficient production methods, so this policy might merely protect inefficient domestic firms.
- To prevent dependency on foreign producers.
- Pro Trade Restriction: If a country relies entirely on imports for some essential product, then in the event of war, natural disaster, production disruption, or transportation crisis, dangerous shortages could arise. If we maintain domestic production capabilities, these shortages cannot happen.
- Con Trade Restriction: If this idea is applied too broadly, virtually no trade would occur and all possible gains from trade would be lost, so this reasoning should only be applied to truly vital goods.
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