What are trade restrictions

Table of Contents

Trade restrictions are measures that countries use to control trade. These can include tariffs, quotas, embargoes, and other barriers.

These protectionist policies can be hard to track and even harder to enforce so it’s important for countries who sign onto international agreements like this not to break them.

Who and Why imposes trade barriers

Some trade barriers are imposed by international treaty, while others may be implemented unilaterally on the part of a country – usually because they want to either protect their domestic industries from foreign competition or limit the amount of imports coming into the country so that citizens aren’t overwhelmed with foreign products and don’t lose jobs. 

Sometimes the reason also can be a national security concern. 

Some trade restrictions may also be imposed as a result of an international agreement or treaty between nations.

WTO and Global Tariffs

The World Trade Organization (WTO) was formed in 1995 to help reduce global tariffs, but many countries still have their own ways of protecting local industries.

World Trade Organization

This means that international trade can be difficult when there are so many different restrictions on goods being sent between countries. 

The following list provides some examples of these tough trade barriers worth mentioning

  • Export tax
  • Import tariff
  • Quota or licensing requirement for imports and exports

And the last but not the least is country application fees – almost every country charges an application fee before allowing a company to sell products within its borders. 

Depending upon where you’re selling, this could run anywhere from $50-$50,000 or more.

Summary

Trade restrictions are measures that countries use to control trade. These may be implemented unilaterally on the part of a country or by international treaty, and they can take many forms. 

As you can see there is no shortage of different ways governments around the world restrict what goods come into their own country’s markets so it is important for the companies to research various country markets to make sure they are not subject to various unknown limitations while trying to sell their products abroad.

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