Japan limits the amount of foreign-grown rice that can be sold in that country by imposing a very high import tax. This protects high-cost domestic rice producers because it forces rice importers to raise prices, making imported rice less competitive against rice grown in Japan. This type of trade barrier is called

Question

a. an embargo.
b. a quota.
c. counter trade.
d. voluntary restraint.
e. a tariff.

Answer 1

The type of trade barrier described in your scenario, where Japan imposes a very high import tax on foreign-grown rice, is called e. a tariff. A tariff is a tax imposed on imported goods, making them more expensive and thereby protecting domestic producers from foreign competition.