What is the estimated economic cost of protectionist policies to the global economy annually?

The estimated economic cost of protectionist policies to the global economy annually is commonly cited in the range of US$300-700 billion. This figure reflects the lost economic efficiency that arises from trade barriers, such as tariffs and quotas, which inhibit free trade and lead to higher prices for consumers, reduced market competition, and misallocation of resources.

Protectionist policies tend to distort market signals, encouraging inefficient industries to thrive at the expense of more productive sectors. As trade barriers increase, the resultant decrease in international trade can hurt all economies involved, as it limits access to goods and services and undermines global supply chains. This estimated cost takes into account various parameters, including the effects on GDP, consumer welfare, and industry competitiveness.

Understanding this range helps contextualize the ongoing debates regarding free trade versus protectionism, as well as the implications for economic growth, innovation, and standards of living across nations.