Theory question 109
International TradeSection B
Why do countries impose restrictions on international trade?
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Model answer
Reasons:
1. To protect infant industries from foreign competition.
2. To correct a balance of payments deficit by reducing imports.
3. To raise government revenue through tariffs.
4. To protect domestic employment.
5. To prevent dumping.
6. To keep out harmful goods (dangerous drugs, unsafe products).
7. To conserve foreign exchange.
8. For security and strategic reasons (self-sufficiency in food, arms).
9. For political reasons or retaliation against other countries.
10. To protect cultural values and reduce dependence on foreign goods.
Explanation
Explain at least five reasons.