1. Trade Balance and Trade Barriers
By Ben Quick

2. Balance of Trade
Trade Balance – the value of exports minus the value of imports (measured in terms of goods).
Trade Deficit – when a nation imports more than it exports.

3. Barriers to Trade
Sometimes governments feel that they need to limit the amount of trade they have with a particular country.
Types of Trade Barriers include:
1. quotas
2. embargoes
3. standards
4. tariffs
5. subsidies

4. Barriers To Trade (cont)
Countries enact trade barriers to protect Oligopolistic Interests.

5. Quotas
- Specific limit to the amount of a product a foreign nation can import.
Lessens the number of products that compete with homeland companies.
The U.S. has a quota on sugar from Brazil in order to protect domestic sugar producers

6. Embargoes the refusal to trade with a nation.
Can cause shortages and high prices for affected products.

7. Standards or Subsidies
Standards – product requirements that make foreign products more expensive.
Subsidies - type of financial government assistance, such as a grant, tax break, or trade barrier, in order to encourage the production or purchase of a good.

8. Tariffs Tax on Imports. Increases the price of other nation’s goods.
Homeland companies will have an advantage.

9. Questions?