Strategic trade policy suggests that a government should use subsidies to support promising firms that are active in newly emerging industries.

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Strategic trade policy posits that a government can use subsidies to support firms in emerging industries that may have the potential to become global market leaders. By protecting these firms from international competition, governments can help them gain a foothold in the global marketplace and eventually become more competitive. However, this policy is controversial and has been criticized for promoting protectionism and distorting international trade.

Strategic Trade Policy Suggests That a Government Should Use Subsidies