Protectionism is when the government makes laws to benefit the companies in their own country.

An example of protectionism would be when a government makes an “import tax” on all imported cars.  This makes cars from other countries artificially expensive.  This means that those imported cars would cost more money than they should.  This obviously provides a big advantage to domestic car companies because these laws make their cars relatively cheaper.

The problem with protectionism is that it hurts the foreign companies.  If one country makes a lot of these laws against another country, then the other country is likely to do the same against your country.  Your country will be able to sell cars easily in it’s own market but will have great difficulty selling them internationally.

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