Test Your Knowledge on Trade Barriers and Their Impact on Global Trade

Restrictions Limiting International Trade

• Trade barriers are government-induced restrictions on international trade that raise the price or availability of traded products.
• Most trade barriers work on the principle of imposing some sort of cost (money, time, bureaucracy, quota) on trade.
• Barriers take the form of tariffs and non-tariff barriers to trade, including subsidies for certain industries such as agriculture and steel.
• High-income countries have fewer trade barriers than middle or low-income countries, and small states have lower trade barriers than large states.
• The most common trade barriers are on agricultural goods, while textiles, apparel, and footwear are the most commonly protected manufactured goods.
• Tariffs have declined in the last 20 years with the growth of the World Trade Organization, but non-tariff barriers have increased.
• Trade barriers can take many forms, including conformity and per-shipment requirements and weak inspection or certification procedures.
• Small firms are most affected by trade barriers.
• Trade barriers negatively impact the developing world by limiting access to markets and lowering prices for crops.
• Trade barriers result in a limited choice of products and force customers to pay higher prices and accept inferior quality.
• Companies must be aware of trade restrictions and regulations and may need a license to ensure a smooth export or import business and avoid penalties or violations.
• Modern trade deals tackle non-tariff barriers to trade, such as different standards and regulations, in addition to tariffs.