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Reasons for Imposing Trade Barriers

Food and Agricultural Produce
From Nigeria
To Netherlands
868 views / 0 experts
Sarah E.
Apr 29, 2020
Why do countries impose trade barriers?

2 answers

Amber S.
Apr 30, 2020
Hi Sarah. Trade is a two-way business. When two countries are both strong in manufacturing and can have equal trade benefits, trade barriers won't be set up. However, not each country can compete with others. When countries or governments think international trade will hurts some of their internal industries, they will take measures of protectionism in order to avoid external competitiveness and protect domestic markets. The scheme cannot be long-time plan because trade barriers will eventually make countries isolated by global markets and lose more opportunities of developing. Those countries will enter a negative circle in trade.
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Apr 29, 2020
Hello Sarah! To my mind, some of the reasons may include: 1. Protection of domestic industries and to insulate them from competition of well-established firms from outside. This would be one of the most common reasons; 2. Imposition of quality standards especially when it comes to agricultural goods and other goods that is part of human consumption. For example, several years ago, USA imposed barriers on toys coming from China because of its lead content which could be harmful for little children; 3. By a long stretch, trying to get other states to comply with certain policy (this would be more of trade sanctions rather than trade barriers, but acts as a barrier nonetheless). An example of this would include the Iranian nuclear program and the trade barriers erected on companies trading with Iran.
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