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A quota restricts the number of products of a certain type that can be imported and, by reducing supply, raises the prices of those imports. The ultimate quota is an embargo, a government order forbidding exportation or importation of a particular product-or even all products-from a specific country. . Example: many nations control bacteria and disease by banning certain agricultural products. Because the United States has embargoes against Cuba (as discussed in our opening case) and Libya, U.S. firms can’t invest in these countries, and their products can’t legally be sold in U.S. markets. . Example: America may put a quota on how many BMW automobiles can be imported form Germany. This would make the price of BMW cars rise. It would also encourage Americans to buy cheaper, American-made cars. America benefits by selling more locally made cars and Germany benefits by selling more expensive BMWs. Tariffs are taxes on imported products. They raise the prices of imports by making consumers pay not only for the products but also for tariff fees. Tariffs take two forms: revenue and protectionist. Revenue tariffs are imposed to raise money for governments, but most tariffs, called protectionist tariffs, are meant to discourage particular imports. . Example: America may charge a tariff on imported cheese to make it more expensive. This would make Americans buy the cheaper, American-made cheese. In the end, by enforcing a tariff, America helps support its farmers and makes more money a. Find FIVE example countries for each trade barriers given.
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