Unit 29: Trade barriers

trade barriers

are goverment-placed restriction trade between nations

advantage

• domestic firms benefit with higher sales

• greater profits

• more income to resource of the owners

disadvantage

trade barriers tend to be harmful to domestic comsumers because of increasing domestic prices, restricting access to imports

5 common reasons why nations use trade barriers

they use it to

• protect domestic employment

• protect young domestic industries

• protect domestic firms from unfair trade practices

• protect domestic economies from the practices of “dumping”

• proctect firms and industries that produce outputs vital to the nation’s security and defense

4 most common trade barriers

• tariffs are simply taxes placed on imports, used to restrict imports

• quotas are simply the quantity restriction placed on a good, service or activity

• subsidies: a subsidy is a grant paid by a government that is often placed to make certain key affodable to citizens of the country, to make foreign imports non-competitive

• embargoes basically prohibit the export or import of anything with another country