Protectionism has grown over the past 18 years, with advanced and emerging economies relying on tariffs, non-tariff barriers, subsidies and industrial policy to keep foreign competitors out of domestic markets, according to economist Lars Feld.
Recent examples include US tariff policy, China’s extensive subsidies in sectors important to industrial economies, and the European Union’s trade and industrial measures. Feld says the EU presents its approach as a response to changing conditions, but that it often aims simply to raise costs for foreign competitors.
The spread of protectionism has coincided with sharper international rivalries. Feld points to increased Chinese pressure on Southeast Asian countries over claims in the South China Sea, escalating tensions along the China-India border, and Russia’s 2014 annexation of Crimea and occupation of areas in the Donbas. Russia’s war against Ukraine escalated in February 2022.
He also cites Iran-backed proxy conflicts in the Middle East, which culminated in Hamas’s October 2023 massacre of Israelis. Feld says China is seeking to present its social model as a values-based alternative to Western liberal democracies, while Chinese and Russian espionage, social-media disinformation and hybrid warfare in Europe have also intensified. He says the latter activities are believed to be driven mainly by Russia.
Sources: Handelsblatt.