trade

4 Major Barriers to International Trade

Nowadays, international trade is considered to be one of the most profitable businesses. However, there are many barriers to the international trade. These are discussed below.

1. Social and cultural barriers

The social and cultural forces of a company can restrict international business. Culture means things such as clothing, food, etc. Social factors include family, religion, education, etc. If the culture of the country varies a lot, then it will hard to sell a product or service to that country.

2. Political barriers

The political situation of a country plays a major role in international trade. If there is political violence, then it can change the attitude towards the international business.

3. Tariffs and restrictions

Tariffs and other restrictions also cause a barrier to international trade. For example, high duty tax can stop a company from expanding abroad. Tariffs are used by many countries to discourage other foreign companies from entering a saturated market.

4. Boycotts

Some governments may have boycotts of letting certain goods enter their company. For example, in some country, Nestle baby milk is prohibited as the baby milk formula may be misleading to the mothers and can be harmful to the babies as well.

Before you make an international move, you need to carefully research the market you are trying to enter. You should learn about their culture, language, laws, and regulations, etc. This way you will be able to overcome these barriers for doing business outside the country. It is always better to form a partnership with a local company. That way you won’t have to worry much about the cultural and social issues of the foreign country.

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