Trade Policies
Definition
Trade policies are rules and regulations countries use when conducting trade with other nations. They can include tariffs (taxes on imports), quotas (limits on quantity), subsidies (financial support) etc.
Analogy
Imagine trade policies as bouncers at a club. They control who gets in (imports), who leaves (exports), how many can enter at once (quotas) and sometimes even offer VIP treatment for certain guests (subsidies).
Related terms
Protectionism: A policy that protects domestic industries from foreign competition by taxing imports. It’s like putting up a fence around your house to keep out unwanted visitors.
Free Trade Agreement: An agreement between two or more countries where they agree not impose tariffs on each other’s goods. It’s like having an open-door policy with your neighbor where you both agree not to charge each other for borrowing stuff.
Globalization: The process by which businesses or other organizations develop international influence or start operating on an international scale. It's like a local restaurant becoming a worldwide franchise.
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