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# National Prejudice and Animosity in Trade

## Definition

The emotional and political factors that influence trade policy, where merchants and manufacturers promote restrictions against foreign competitors based on nationalistic sentiments rather than economic reasoning, leading to mutually harmful trade wars.

## Source Chapter

Book IV, Chapter 3

## Context

Smith identifies this as a primary driver of unreasonable trade restrictions, arguing that merchants exploit national prejudices to secure monopolies and that governments foolishly adopt these policies based on animosity rather than economic self-interest.

## Economic Domain

Regulation

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