Course Instructor:
Dr. Md. Sazib Miyan Textbook:
Assistant Professor
Dept. of Finance and Banking • International Economics (13th edition)
Begum Rokeya University, Rangpur By: Dominick Salvatore
sazibmiyan@[Link] • International Economics (11th edition)
By: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
Understand the different types of barriers to
international trade
Distinguish between tariff and non-tariff
barriers
Learning
Objectives
Analyze arguments for restricting trade
Examine key instruments of commercial
policy
Definition: Government-imposed
restrictions on the free exchange of
goods and services between
countries
Barriers of Purpose: Protect domestic
industries, preserve national
Global Trade security, generate revenue
Tariff Barriers
Two main categories: Non-Tariff Barriers
Definition: Taxes imposed on imported goods
Types of Tariffs:
• Ad Valorem Tariff – Based on percentage of value
• Specific Tariff – Fixed amount per unit
Tariff Barriers • Compound Tariff – Combination of both
Impact:
• Increases price of imports
• Protects domestic industries
• Generates government revenue
Example: 25% tariff on steel imports in the U.S.
Definition: Non-tax measures that restrict
trade
Types:
Non-Tariff • Quotas – Limits on quantity of imports
Barriers • Licensing requirements
• Standards and regulations – Health, safety,
(NTBs) environmental
• Customs procedures & delays
• Voluntary Export Restraints (VERs)
• Subsidies to domestic producers
Impact: Often less visible, but can be more
restrictive than tariffs
Protecting Infant Industries
National Security Concerns
Preserving Jobs and Domestic Employment
Arguments for
Restricting Preventing Dumping and Unfair Competition
Trade Promoting Strategic Industries
Correcting Trade Imbalances
Ensuring Product Standards & Safety
Inefficiency and higher
consumer prices
Retaliation and trade wars
Criticism of
Trade
Restrictions Reduced global
competitiveness
Stagnation of innovation
Definition: Government measures affecting
international trade
Objectives:
Commercial • Promote exports
Policy of • Restrict imports
• Balance of payments stability
Individual
Instruments of Commercial Policy:
Country
• Tariffs and NTBs
• Export subsidies
• Import quotas and licenses
• Exchange controls
• Trade agreements (e.g., WTO rules, bilateral FTAs)
Real-World U.S.–China Trade War: Tariff
Examples escalation
EU Food Import Standards: NTBs
based on health regulations
India’s Import Restrictions for
Local Manufacturing Boost
WTO’s role in dispute settlement
Should developing countries
protect their industries with tariffs?
Discussion
Is national security a valid reason
Questions / for trade barriers?
Class Activity
Debate: "Trade restrictions do
more harm than good."
References/Further Reading
• Salvatore, D. (2019). International Economics. (13th Edition). John
Wiley & Sons.
• Krugman, P. R., Obstfeld, M., & Melitz, M. (2018). International
Economics: Theory and Policy (11th Edition). Pearson Publication.
• WTO Reports
• IMF and World Bank publications
• News sources (e.g., The Economist, Financial Times)