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The economic policy of protecting certain industries within an economy from outside competition, usually by the imposition of tariffs. In theory capitalism encourages free trade between countries as the best and most efficient way for the world economy to operate. This approach is championed by America where free market capitalism has been the foundation of that country's growth. However, many countries, including South Africa seek to protect especially nascent industries by imposing tariffs on imported competitive products. The effect of a tariff is that it makes the imported products more expensive and this tends to increase inflation and the cost is born by consumers. For example, the cement industry is constantly trying to get the government to impose tariffs on cheap cement imported especially from Pakistan. However, cement is a high bulk low value product and it should not be possible for Pakistan to manufacture it and transport it here for less than we can make it locally. That suggests that the local cement industry is inefficient - and raises the question of why we should protect an inefficient industry at the expense of the consumer. The cement industry says that the lack of protection will mean the loss of jobs here in South Africa, but more expensive cement will inevitably mean less construction and a loss of jobs in that industry. Ideally, each country should only produce those products which it is best suited to producing. If the Pakistanis can make cement more cheaply than us then it will benefit our economy to take their cheap cement rather than trying to make more expensive cement locally.

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