Economic Restriction Affecting The US Economy

Nowadays, we are living a world that countries no longer trade domestically in its own country. Instead of trading in domestic market, there is a increasing trend to trade worldwide in the international economy. We are not living in a world that contain only one country and one government. International trade means a collision of many countries’ economy, they have different perspectives on economy based on different countries’ benefits. In order to maximize their own countries’ interest or protect peace, government would like use tools such as economic sanctions, tariffs, quotas. This paper will explore what economic restriction is, how economic restriction affect the U.S economy, and how the government use it. What is economic restriction
? Nick said that “In economics, a trade restriction is any government policy that limits the free flow of goods and services across borders.”(Libby, 2008) Trade restrictions can provide protection to domestic industries by tariff, quota, and economic sanction. When companies or individual import goods from other countries, they have to pay the Tariff. It not only increase the price of production from foreign countries which could discourage importation, but also has an advantage for government in that it will bring tariff. As for quota, according to “Quota is a numerical limit a government imposes on the quantity of a good that can be imported into the country.”(O’Brien, 2015) Quotas are used in combination with tariffs. Moreover, trade restrictions can also be used as a tool for foreign policy, which is economic sanctions. It could be regarded as a trade barrier or a financial block on exports, imports, investment and economic transactions. For example, in 1961, United States went against Cuba due to political reason. The American government levied economic sanction and embargoed to the whole Cuba to achieve American policy and economic goals.(Jonathan, 2015) So economic restriction is a tool that mostly used by nearly every government in solving problems, which is better than war. Because war may cause massive destruction.
Circumstances for imposing economic sanctions include economic, political and social issues. Whenever issues are unresolved between countries, countries may use military force or economic sanctions to achieve policy goals. Economic sanctions are tools mostly used by many governments in resolving issues. This is because war may cause massive destruction.