I think normal economic theory is that information isn't perfectly and instantly communicated through the market (see, for instance, post-earnings-announcement drift). A consequence of that is that new competitors operate at a disadvantage: even if a competitor is better, consumers don't know that yet. So I'd think protectionism to preserve an established producer at the cost of competitors makes the pie smaller for everyone (because it just reinforces a market imperfection that already exists), but protectionism to promote smaller competitors at the cost of an established producer can go either way, depending on whether the competitors are better.