TRADE BARRIERS TRADE BARRIERS n n Trade barriers

TRADE BARRIERS

TRADE BARRIERS n n Trade barriers are any of a number of government-placed limits on trade between nations. The most common sorts of trade barriers are things like tariffs, quotas, and embargoes.

n All nations use some group of trade barriers for their own benefit.

Tariffs n n Tariffs are a fairly common form of trade barriers, and are essentially taxes on goods as they cross the borders of a nation. Tariffs nearly always are placed on goods that are brought into the country.

n n Some tariffs are placed simply to earn money for the government. Other tariffs exist as a form of protectionism, to make imported goods more expensive than they might otherwise be, in order to protect domestic (home country) industries.

Embargo n n n An embargo can be seen as the most extreme of the trade barriers. Embargoes basically prohibit the import or export of anything with another country. It is used by one nation to isolate another and to cause problems.

Quota n n A quota is a different way of limiting the amount of foreign goods that can come into a nation. It sets a specific amount or number of a particular product that can be brought into a nation in a given time period.

SPECIALIZATION § No country can produce everything that it needs. § Specialization is a way to build a good economy and to earn money to buy things that the country cannot make.

§ The country has to decide on a product that they have and their product is in demand throughout the world.