Freedom or Protection: The Era of Protectionism
Freedom or Protection: The Era of Protectionism
  • Reporter Kim Ri-ahn
  • 승인 2024.06.12 14:31
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▲The war of tariff between the two great powers / Flexport
▲The war of tariff between the two great powers / Flexport

  In the early 1990s, the United States emerged with unprecedented global dominance as the Soviet Union, its formidable Cold War rival, collapsed. Until recently, the US had held on to its hegemonic power that no other countries could dare to covet. Nonetheless, the recent emergence of newly-developed countries, including China, has been a significant threat to the US. Low-priced industrial products made in China are exported worldwide, and corporations such as AliExpress and Temu have gone beyond the offline market and expanded their market to online platforms. These online shopping platforms from China, also known as C-commerce, have dominated the online shopping market, while other online media platforms from China, including TikTok, gained popularity worldwide. The remarkable economic growth of China shocked many developed countries, and a great majority of these countries are trying to adopt protective measures against foreign capital, including capital from China, under the name of “Protectionism.”

  Although regulating the growth of Chinese corporations is one of the solid objectives of the restrictions, it is not the only objective of the policy. Increases in the tariff rate on imported products is one of the examples of Protectionism shown in trade, to protect domestic industries. The recent announcement of Joe Biden, President of the United States, explains that the U.S. is increasing the tariff rate on eco-friendly products imported from China, including electric cars and solar panels, for the protection of jobs and the domestic manufacturing industry. This movement was followed by the chair country of G7, Italy, where the minister of economics claimed that Europe should also increase the tariff rate on Chinese-made products to protect domestic businesses.

  “TikTok ban” policy of the United States, is based on concerns about the privacy policy of the online platform from China. There have been concerns that the Chinese government could use online platforms like TikTok to monitor and collect private information of global users, based on the securities law of China, and governments and Congress have been trying to adopt such a policy.

  The recent controversy over the cross-border shopping limitation policy of Korea is another example of regulating foreign capital. According to Korea Customs Service, the size of E-commerce goods that passed customs clearance in Korea was worth 5,278 million USD in 2023 alone, and China takes 45% of the total cost. Despite its low price and accessibility, there have been safety issues and concerns about toxicity found in some one the products made in China, and although the regulation was halted due to its excessive regulation, this policy clearly shows that safety issues could be another reason to regulate foreign goods and capital.

  The examples of Protectionism shown above highlight the complexity the regulation entails. Although the regulations are mostly adopted to protect the citizens of the country - to protect domestic industries, to protect the privacy of individuals, to protect the safety of imported goods – it is also open to criticism for regulating an individual’s freedom to consume certain goods or services. It is the government’s job to find a common ground that both consumers and the government can accept, and to make sure the regulation does not hurt the stability of the global economic market.