Barriers to International Trade Flashcards

All 6 cards in this deck

What is a tariff?

A tax placed on imported goods.

What effect does a tariff have on an imported product?

It raises its cost, so the price to customers rises and it becomes less competitive against domestic goods.

What is a trade bloc?

A group of countries that agree to trade with each other with reduced or no barriers, e.g. the EU.

How does a trade bloc disadvantage businesses outside it?

They face tariffs and barriers when selling into the bloc, making their goods more expensive than members'.

True or false? Tariffs are paid by the exporting business's home government.

False. A tariff is a tax charged by the importing country on goods entering it.

Give one benefit to a member business of belonging to a trade bloc.

Tariff-free access to a much larger market of customers in member countries.