What does protectionism refer to in a government context?

Protectionism refers to actions and policies adopted by a government aimed at supporting and safeguarding its domestic industries from foreign competition. When a government implements protectionist measures, it often includes tariffs, quotas, and subsidies designed to make imported goods less competitive compared to local products. This approach is typically motivated by the desire to ensure that local businesses can thrive, preserve jobs, and maintain national security and economic independence.

In contrast, promoting free trade would advocate for minimal restrictions on trade across borders, which is contrary to protectionist policies. Regulating profits is more about overseeing financial gains rather than protecting domestic businesses from external competition. Encouraging foreign investments might involve lowering barriers to attract outside capital, which does not align with the essence of protectionism, where the focus is on bolstering local enterprises against foreign entities. Thus, the answer accurately captures the central idea of protectionism in government policy.