Respond to at least two response posts made to your classmates.
Your responses should be more than, “I agree.” Find ways to respond to your classmates, though different ideas, including articles that support or challenge and/or videos. Add your own experience and then ask questions that will help them to think further or apply their thoughts to different situations.
Trade barriers are government policies which place restrictions on international trade. Trade barriers can either make trade more difficult and expensive (tariff barriers) or prevent trade completely (e.g. trade embargo)
Types of Trade Barriers:
1. Voluntary Export Restraints (VERs):
They are agreements between an exporting and an importing country that limits the quantity businesses can export during a period. Even though the term says the agreement is voluntary, it is usually not. By reducing the quantity exported, the exporting country can increase prices and total revenue.
2. Regulatory Barriers:
Any “legal” barriers that try to restrict imports. These include things like safety standards, pollution standards, product standards that specify that the product should meet or exceed standards set by the local government. For example, car manufacturers often have to pass certain safety ratings to sell the car in the importing country.
3. Anti-Dumping Duties:
Dumping happens when the exporting producer sells goods below cost. The government then can impose a duty on the good till the World Trade Organization decides the issue. However, firms often claim that the good is produced below the cost to buy more time for themselves. It is often difficult to determine the actual costs of the firm.
Governments offer subsidies to help make firms more competitive by lowering their costs.
A tariff is a type of trade barrier that acts as a tax on imports. The tariff may be in the form of a specific or ad valorem tax. Tariffs raise the price of the imported good to lowers their consumption. This price increase encourages consumers to pick the local option.
A quota, a type of trade barrier, is a restriction on the quantity that can import into a country. Quotas and Tariffs are effectively the same except that governments collect revenue from tariffs, while exporting firms can collect extra revenue from quotas. This increases the firm’s export revenues.
The four trade barriers are border barriers, technical barriers to trade, government influence barriers, and business environment barriers. Border barriers like the one on the US/Mexico Border ensure goods are being brought through the correct way and not being illegally smuggled into the country. The technical barrier ensures that companies exporting goods to another country meet the hardware/software standards and ensure no viruses enter their country. With government influence barriers, one might be blocked from bidding on a government project, or state-owned companies have more treatment than big box companies. Business environment trade is treating someone differently based on their culture and providing unfair rules to outsiders.
ubsidies, anti-dumping taxes, regulatory barriers, and voluntary export restraints are the four primary types of trade barriers.
No matter how big or wealthy a country is, its industrial industries will need to look for resources beyond its borders. The ability to trade internationally helps countries to receive products that they would not be able to create on their own. For example, several of the Middle East’s smaller countries. There is a lot of oil in these areas. They have amassed such fortune as a result of their efforts. Even though they have gathered a large sum of money, they are unable to create many items on their own. This is why they exchange oil, which is plentiful, for other goods. Oil, for example, might be swapped for vehicles or airplanes in countries like Japan, Germany, or the United States.
Gitman, Lawrence J., et al. “Barriers to Trade.” Introduction to Business, OpenStax, 18 Sept. 2018, https://opentextbc.ca/businessopenstax/chapter/barriers-to-trade/ (Links to an external site.).