Why might new industries require temporary protection?

New industries often require temporary protection to allow them to develop and grow before they have to compete with established international competitors. This form of protection can come in the shape of tariffs, quotas, or subsidies, which provide a nurturing environment for nascent businesses.

When a new industry emerges, it typically lacks the resources, experience, and economies of scale that more established firms in other countries possess. By providing temporary protective measures, the government enables these new industries to establish themselves, invest in technology, increase efficiency, and build a customer base without the immediate pressure of competing against well-established foreign firms that have the advantage of lower production costs and broader market reach.

This time is critical for the new industry to reach a sustainable level of competitiveness. Once it has matured and gained enough market share and operational strength, it can then face international competition on a more level playing field.