What are trade barriers?

Trade barriers refer to various government-induced restrictions on international trade that are implemented to control the amount of trade across borders. These barriers can take multiple forms, including tariffs, quotas, import licenses, and various regulatory policies that countries establish to protect their domestic industries and control the influx of foreign goods.

The correct answer highlights the essential role of government actions in modifying and influencing trade flows between countries. For example, tariffs are taxes imposed on imported goods, making them more expensive compared to domestic products, thus discouraging imports and supporting local businesses. Quotas may limit the quantity of a specific good that can be imported, further controlling trade and potentially benefiting domestic producers.

Understanding trade barriers is crucial for analyzing how governments engage in trade policy and the impacts these policies have on international commerce, local economies, and consumer choices.