International Trade Policy: A Technical Note

Case Solution

Robert Grosse
Thunderbird School of Global Management ()

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.

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