2 years ago
what measures do governments take to promote exports and restrict imports?
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There are several such measures available to governments, though international trade agreements may limit those.
- Tariffs: placing an import tax on imports increases the price at which they can be profitably sold in the country, reducing demand.
- Outright bans: for example, the US has banned cigars from Cuba for several decades now.
- Limits on allowed quantities: for example, most countries limit alcohol carried into the country by individuals returning from trips abroad. Switzerland limits e.g. French butter to 125g per person per day, among other things.
- Subsidies: governments can provide tax breaks, subsidies, or other ways to financially support companies producing export goods, reducing the cost to those companies, allowing them to sell at lower prices, which increases foreign demand.
- Manipulating currency exchange rates: as your own currency is devalued (i.e. made less valuable relative to foreign currencies) the cost overseas for foreigners to by your exports, calculated in their currency, goes down, increasing demand for your exports, while at the same time, the cost for your own people to buy imports in your currency goes up, reducing demand for imports.
- International trade agreements address such things as "dumping" a situation in which one country floods the international market with goods below cost (for whatever reason). By signing such agreements, governments can prevent a disastrous increase in imports and decrease in exports.
- Tariffs: placing an import tax on imports increases the price at which they can be profitably sold in the country, reducing demand.
- Outright bans: for example, the US has banned cigars from Cuba for several decades now.
- Limits on allowed quantities: for example, most countries limit alcohol carried into the country by individuals returning from trips abroad. Switzerland limits e.g. French butter to 125g per person per day, among other things.
- Subsidies: governments can provide tax breaks, subsidies, or other ways to financially support companies producing export goods, reducing the cost to those companies, allowing them to sell at lower prices, which increases foreign demand.
- Manipulating currency exchange rates: as your own currency is devalued (i.e. made less valuable relative to foreign currencies) the cost overseas for foreigners to by your exports, calculated in their currency, goes down, increasing demand for your exports, while at the same time, the cost for your own people to buy imports in your currency goes up, reducing demand for imports.
- International trade agreements address such things as "dumping" a situation in which one country floods the international market with goods below cost (for whatever reason). By signing such agreements, governments can prevent a disastrous increase in imports and decrease in exports.
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
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