Question

Who benefits and who is damaged from trade barriers.

Answer 1

Answer) Trade barriers are government imposed restrictions on the free exchange of goods and services. Impost policies like tariffs, quota, import licensing and other import charges are some examples of Trade Barriers.

The benefits and damages of import restrictions are uneven. Because a tariff is a tax, government revenue will increase (with the increase in import) as tariff imposed on imports increases. Domestic industries also get benefitted from the import tariffs because of the decrease in competition between industries in the market but for foreign consumers and businesses, higher import prices mean a higher price of the goods.

So, the government and the domestic industries get the benefit of import restrictions whereas consumers do not. Therefore, we can say that import restrictions are pro-producer and anti-consumer.