Trade barriers
Definition
Trade barriers are government-imposed restrictions on international trade designed to protect domestic industries, raise revenue, or achieve political goals. Common types include tariffs (taxes on imports), quotas (limits on quantity of imports), embargoes (total bans), and subsidies to domestic producers.
Examples
- The Smoot-Hawley Tariff Act of 1930 raised tariffs on over 20,000 imported goods and worsened the Great Depression
- NAFTA (1994) eliminated most trade barriers between the U.S., Canada, and Mexico
- The U.S. placed an embargo on Cuban goods beginning in 1960 for political reasons
Key Fact
Protective tariffs raise the price of imports to make domestic goods more competitive; revenue tariffs are designed primarily to generate government income.
Study This Concept
Practice trade barriers with free review games in these units: