Trade Barriers

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QUESTION
 
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.
My post
Trade Barriers:
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.
4. Subsidies:
Governments offer subsidies to help make firms more competitive by lowering their costs.
5. Tariffs:
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.
 

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