Welcome to Thomas Insights — every day, we publish the latest news and analysis to keep our readers up to date on what’s happening in industry. Sign up here to get the day’s top stories delivered straight to your inbox.
With the global economy experiencing severe socio-political economic disruptions over the past few years — such as the COVID-19 pandemic, the U.S.–China trade war, and the instability in the UK due to Brexit — government-imposed trade protectionist policies and theories have been causing manufacturers to scramble to amend their supply chain strategies. Global manufacturing supply chains may need to succumb to economic nationalism as they face the end of globalization.
Although these policies have technically been designed to protect the economy from the dangers of international trading, a lot of people believe protectionism in manufacturing is problematic for the U.S. manufacturing industry.
Trade protectionism was designed to boost domestic manufacturing by restricting trade, thereby improving the job market. Some of its policies, however, include eyebrow-raising aspects such as import tariffs, import quotas, import and export licenses, domestic subsidies, localization requirements, administrative trade policies and barriers, antidumping policies, exchange rate controls, and even a trade war and retaliation among nations. For example, the U.S. and Japan have long put up tariffs and administrative trade policies against each other, costing billions of dollars in increased costs and less consumer choice.