Textbook: Hill, Charles, W. L. & Hult. G. T. (2019). International business: Competing in the international marketplace (13th ed.).
Chapter Seven: Government Policy and International Trade
Government policy can have an effect on global trade. Governments can cause a great impact on the cost and types of imports and exports that can cross their border. For example, the United States strictly controls the export of military goods to foreign countries. Similarly, the United Stated has placed high tariffs on import commodities which made US-produced commodities of the same kind appear less expensive and reduced the demand for foreign commodities. Governments have a duty to protect their own country’s consumers and businesses from unfair trade practices such as preventing commodity dumping, preventing the import of hazardous commodities, human rights violations, and stopping violations of intellectual property rights. To referee disputes between countries, the World Trade Organization (WTO) was formed to promote an environment of fair and safe trade between countries.