What methods does the government use to restrict trade in Germany ?
A tariff is a government tax levied on a product as it enters or leaves a country: (1) export tariff, (2) transit tariff, and (3) import tariff.
- Tariffscanprotect domestic producers because an import tariff raises the cost of imports relative to domestically produced goods.
- 2.Imports and Export Quotas:
- Import quotaslimit the quantity of an import and thereby protect domestic producers and help them to maintain market shares and prices. Import quotas can also force non-domestic firms to compete for market access by lowering prices or by giving other concessions.
- Export quotasboost supplies of a product in a home market, such as when a country blocks the export of a natural resource. Export quotas can also be used to restrict a product’s supply on world markets and thereby increase its global price.
- An embargo is a complete ban on trade (imports and exports) in one or more products with a particular country.
- It is the most restrictive nontariff trade barrier available and it is often used to achieve political goals.
- An embargo can be imposed by individual nations or by organizations such as the United Nations.
- Local content requirements:
- Local content requirements are laws stipulating that producers in the domestic market must supply a specified amount of a good or service.
- Administrative delays:
- Administrative delays are regulatory controls or bureaucratic rules designed to impair the rapid flow of imports into a country. Eg: leather import from newzealand
- Currency Controls:
- A government can discourage imports by setting an exchange rate that is unfavorable to potential importers.
- On the other hand, it can encourage exports by setting an exchange rate (in dollars system) that is favorable to potential exporters.