Protectionism

Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to discourage imports and prevent foreign take-over of domestic markets and companies. During the Great Depression, there was more protectionism in Europe that in the United States, but both societies became less open. The United States passed the Smoot-Hawley Tariff Act in 1930, and it is believed to have prolonged the Depression.

New structures like the G20, European Union Commission and the International Monetary Fund help to curb protectionist policies, but don’t eliminate them. It is still too early to tell how current policies will impact the scale of the Great Recession.