This note explains some of the key issues in international trade policy. To do this, it is necessary to examine the reasons why governments impose tariff and non-tariff barriers to imports, although there are also some other problems, such as export subsidies and fiscal policies, that affect international trade. A key aspect of this policy analysis is to recognize that governments must pursue policies that pursue not only economic but also political and social goals. For example, a trade policy that hurts domestic consumers may make a lot of sense for a government that needs to satisfy a particular political or social group in the country, such as a powerful union or political party whose voters oppose imports.
Thunderbird School of Global Management (TB0567-PDF-ENG)
August 26, 2019
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