Types of trade restrictions / methods of protection: embargoes

International Trade and Globalisation – Globalisation and Trade Restrictions

Types of Trade Restrictions

Trade restrictions are rules that countries use to control the flow of goods and services across borders. They can be thought of as traffic signs that tell businesses how much they can buy or sell.

• Tariffs – taxes on imported goods.
• Quotas – limits on the quantity of a product that can be imported.
• Embargoes – bans on trade with a particular country or group.
• Subsidies – financial help for domestic producers.

Embargoes – The “Ban” Method of Protection

Think of an embargo as a school rule that says you cannot bring certain items into the school. In international trade, an embargo means a country or group of countries refuses to trade certain goods with another country.

1. Full embargo – no trade at all.
2. Partial embargo – only certain goods are banned.

Example: The United Nations imposed a full embargo on Iraq in the 1990s, meaning no oil, weapons, or other goods could be traded with Iraq. 🚫🌍

Why Countries Use Embargoes

• Political pressure – to influence a country's actions.
• National security – to stop weapons from reaching enemies.
• Human rights – to punish governments that violate rights.

Exam Tips – Embargoes

Quick Quiz

Fill in the blank: An embargo is a ban on trade with a specific country. ??

Glossary

Mathematics note: The tariff rate can be calculated as $T = \frac{P_{\text{import}} - P_{\text{domestic}}}{P_{\text{import}}} \times 100\%$ where $P_{\text{import}}$ is the price of the imported good and $P_{\text{domestic}}$ is the domestic price. 📐