Of course every country prefers their own companies etc., but countries like France just take it to another level. The USA is not going to force a radio station focused on Japanese anime music to play music made in America at least 40% of the time.
You are talking about the « French Cultural Exception » which, like its name implies, is an exception to protect French culture and arts from the free markets.
We know that we will never be as strong as US majors in cinema, music, arts, … so what this exception is trying to achieve is to preserve the French culture and values (including moral values) through arts. While implementation is falling apart those days and the rules are clearly abused by a lot of companies, I truly think it was a great idea when it was imagined.
For instance, Hollywoodian cinema (and don’t get me wrong, we love most of it as an art) naturally promotes US values such as paid education, paid healthcare, free carrying of weapons, strong Christian values, neoliberalism, the idea that US is the center of the civilized world … (I randomly chose those ideas with no judgment whatsoever, just because we have different visions on those topics, so don’t blame me). Those ideas are clearly infusing into young generation as the normality so I do think the idea of this exception was genius. The idea was not to ban anything US (we love US arts) but to keep it in the context of « this is US art, so that’s why [insert_something_different] » instead of « this is mainstream art depicting the world as is should be ».
Maybe it’s hard to see it from the US side because you are in the powerful side but imagine if China invested billions in (good) arts and surpassed Hollywood with (really good) movies promoting the Chinese system moral values. I’m pretty sure the US would react immediately and I think it would be normal.
But this is just … an exception. And don’t be afraid, our current government is really happy to play the free markets game, including in healthcare.
Every single country engages in some sort of protectionism, including USA the mecca of "free market", it's called corporate subsidies.
https://news.ycombinator.com/item?id=32254681