Final answer:
Tariffs and quotas are tools of protectionism, which governments use to shield local industries from foreign competition by making imported goods more expensive and limiting their quantity. Protectionism benefits domestic manufacturers but can lead to higher consumer prices.
Step-by-step explanation:
Tariffs and quotas are the tools of protectionism used by governments to shield local industries from foreign competition. Governments implement these trade barriers such as import tariffs, which are taxes on imported goods, and import quotas to protect domestic jobs and industries, often under the policy known as import substitution industrialization. These measures aim to reduce foreign competition by making imported goods more expensive and limiting the quantity that can enter a country.
While protectionism can benefit domestic producers by reducing foreign competition and helping to keep manufacturing jobs within a country, it often results in higher prices for consumers. For example, protectionist policies have been used to protect manufacturing jobs from Michigan to Mexico, and in Latin American countries to support their infant industries.