Trade barriers are designed to protect producers in the country from being put out of business by foreign producers with lower prices and to prevent trade deficits from happening.

A true
B false

A false

True

The statement is true. Trade barriers are policies and regulations implemented by governments to restrict or control the flow of goods and services between countries. One of the primary reasons for implementing trade barriers is to protect domestic producers from foreign competition. By imposing barriers such as tariffs, quotas, or import restrictions, countries can make it more difficult or expensive for foreign producers to sell their goods in the domestic market. This protectionist approach aims to safeguard local industries and prevent them from being driven out of business by foreign producers who can offer lower prices due to factors like lower labor costs or subsidies.

Another objective of trade barriers is to prevent trade deficits, which occur when a country imports more than it exports, resulting in a negative balance of trade. By restricting imports, countries can reduce their trade deficits and promote a more favorable balance of trade. This is based on the belief that trade deficits can negatively impact domestic industries and cause job losses.

It's worth noting, however, that while trade barriers may protect domestic producers and reduce trade deficits in the short term, they can have negative consequences in the long run. Trade barriers can lead to higher prices for consumers, reduce choices and variety in the market, hinder global cooperation, and potentially provoke retaliatory measures from other countries, thus damaging overall economic growth and relations between nations.