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Trade Barriers

Trading Term

Trade barriers are government-imposed restrictions on international trade, which can take various forms such as tariffs, quotas, and subsidies. Tariffs are taxes levied on imported goods, making them more expensive and less competitive compared to domestic products. For instance, if a country imposes a tariff of 10% on imported steel, the price of foreign steel increases, potentially benefiting local producers. These barriers can protect nascent industries, preserve jobs, and maintain national security. However, they may also lead to inefficiencies, higher consumer prices, and strained international relations. Understanding trade barriers is crucial for investors and economists analyzing global market dynamics.

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