abstract:The infant industry argument is an economic rationale for trade protectionism. The core of the argument is that nascent industries often do not have the economies of scale that their older competitors from other countries may have, and thus need to be protected until they can attain similar economies of scale.
When these mature industries are foreign, supporters of the infantindustryargument call for tariffs, a tax on foreign goods, to force the foreign price above the already higher price of the infant domestic goods.
The infantindustryargument will complain that, in such cases, if the businesses involved were just given extra profits through tariffing their foreign competition, they could pay for the labor necessary to create the infrastructure that would allow them to compete naturally without the tariff.
The old argument that European governments used to justify them was that Airbus was an infantindustry that needed support to prevent Boeing from having a global monopoly of civil jet airliners.