Summary
Highlights
Governments sometimes restrict trade to help developing domestic industries grow without international competition or to protect sensitive sectors like defense or agriculture. Trade restrictions can also be used as a political tool to punish other countries for actions deemed undesirable, such as imposing sanctions on Iran or North Korea for developing nuclear weapons.
Restrictions on trade include tariffs (taxes on goods), quotas (limits on import quantity), standards (safety or ingredient requirements), administrative delays (inspections, paperwork), countertrade requirements (mandating purchases from the restricting country), and embargoes (total trade blocks).
Beyond direct tactics, governments also indirectly affect trade by providing subsidies or loans to domestic companies, which can reduce demand for imported goods. These government actions, both direct and indirect, significantly influence global trade.