Pros And Cons Of Protecting An Infant Industry

124 Words1 Pages
In economics, "infant industry" is a new industry where at the beginning experiences difficulties in competing with established competitors. People can argue that we need to protect the infant industry because it would keep international competitors from damaging the new industry. An infant industry do not have the capacity to personally protect themselves (economies of scale that older competitor normally have). Thus, people think that we should protect them until they grew enough to protect themselves alone. However, we encounter risks while protecting an infant industry. To protect them, the governments enact tariffs, quotas, import duties and exchange rate controls nevertheless, most of the time, they meet difficulties to remove them