ABSTRACT
Protectionism is considered by neoliberals as a threat to economic progress and trade barriers may reduce real incomes of consumers when increasing the prices of both imported goods and the domestically manufactured products with which they compete. Protectionism reduces incentives for local firms to operate more efficiently, to hold down costs, and to develop new technologies or products and to conquer new markets. Protectionism leads to retaliation by trading partners, which provokes a downward spiral and a weakening of the international banking system.
