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Trade barriers: tariffs, subsidies and quotas.

28 十二月, 2015 - 17:16

A tariff is a tax on an imported product that is designed to limit trade in addition to generating tax revenue. It is a barrier to trade. There also exist quotas, which are quantitative restrictions on imports; other non-tariff barriers, such as product content requirements; and subsidies. By raising the domestic price of imports, a tariff helps domestic producers but hurts domestic consumers.

Quotas and other non-tariff barriers have similar impacts.

\mid A tariff is a tax on an imported product that is designed to limit trade in addition to generating tax revenue. It is a barrier to trade.

\mid A quota is a quantitative limit on an imported product.

\mid A trade subsidy to a domestic manufacturer reduces the domestic cost and limits imports.

\mid Non-tariff barriers, such as product content requirements, limit the gains from trade.