The rise of protectionism and its effect on globalization


Protectionism is perhaps one of the practices that poses the greatest threat to healthy globalization in the logistics industry due to the negative implications it has, both in the short and long term.

This practice consists of limiting or completely blocking imports from other countries in order to give priority and privilege to local industry, which is a clear example of unfair competition as long as the imports do not legitimately threaten the interests of a specific nation or market.


The positive and negative effects of protectionism on the global economy

Protectionism has positive aspects in protecting domestic industries and local jobs through tariffs and quotas that make foreign products less competitive. This is crucial in industries that are strategic or sensitive to national security.

However, protectionism also has significant negative effects. It increases costs for consumers by making imported products more expensive with tariffs and quotas. In addition, it can trigger trade conflicts between nations and generate retaliation, damaging international relations.

It can also stifle competitiveness and innovation in domestic firms, as over-protection reduces pressure to improve product quality and efficiency, which in the long run can lead to economic stagnation. It is therefore essential that governments carefully consider these effects when designing trade policies.


Effect of protectionism on globalization

Protectionism clearly hinders the proper development of a globalized market in which international rules are respected if it is applied improperly, since aspects such as the free movement of goods and services, labor, capital, and the exchange of technology and information are diminished by the imposition of a certain country.

This avoids both the economic and knowledge exchange between different nations in order to ensure constant growth in logistics, not only for the benefit of the companies involved in the industry, but also for the end consumers who get more flexibility when placing their orders.

It is worth mentioning that protectionism should not always have negative connotations within the logistical context, since it can be implemented in situations in which other nations wish to import products in an abusive or anti-competitive manner, going beyond the ethical margins at the international level.

Beyond any inconvenience that excessive protectionism can cause, a good cargo insurance is, without a doubt, the smart way to protect the reputation of your business and the security of the customers who trust in the services you offer. Contact us to receive all the details about our insurance and see first-hand why we are still the experts in taking care of your investment.



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