Protectionism is an economic ideology that advocates using tariffs and other government restraints to protect domestic businesses from competition. Protectionism may stem from various circumstances, such as nationalist pride or fears of a global race to the bottom.
In the context of interstate commerce, in Philadelphia v. New Jersey, the United States Supreme Court reflected on its longstanding concerns about the negative effects of protectionism. Discriminatory state laws that favor in-state economic interests and motivated by simple economic protectionism are subject to a “virtually per se rule of invalidity.” A state can only overcome this rule by showing that it has no other means to advance a legitimate local purpose, as the Supreme Court ruled in Maine v. Taylor. Moreover, in United Haulers Association, Inc. v. Oneida-Herkimer Solid Waste Management Authority, the Supreme Court declared that rigorous scrutiny is appropriate when a law favors in-state business over out-of-state competition because the law is often the result of simple economic protectionism. By contrast, advanced state legislation that does not patently discriminate against interstate trade is evaluated with a more flexible approach.
Contrast with: Free trade.
[Last updated in January of 2024 by the Wex Definitions Team]