Restrictions on international trade, Microeconomics

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Protection against dumping:

It could be looked at as the export of commodities priced below cost of production. Dumping is generally looked upon as an unfair trading practice and for that reason industries fearing competition from dumped goods ask for tariffs to protect them. An export subsidy is s salient form of dumping. Export subsidies are direct payments made or the granting of tax relief and subsidized loans to the nation’s exporters so as to stimulate the nation’s exports. These make the nation’s exports price competitive on the international markets.

National Security: Some key industries such as agriculture and industries producing goods that are important for the defense of the country must be maintained. Countries therefore protect these industries.

To raise revenue: Tariffs are sometimes justified as a means of raising revenue for the government, but in modern economies this is a comparatively unimportant source of government revenue.


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