Methods of Protection (Types of Trade Restriction) — Globalisation & Trade Restrictions | IGCSE Economics

Exam Frequency Analysis

Past paper frequency (2018 to 2024)

This topic accounts for approximately 6% of your exam marks.

new

Low

New6%

New emphasis in the 2027 syllabus; globalisation, multinational companies and trade restrictions are now grouped as a distinct topic. Guidance based on specimen materials.

Despite the gains from free trade, governments often restrict imports to shelter domestic industries. The main tools are:

(import duty). A tax added to the price of imported goods. It makes imports dearer, so consumers switch to domestic substitutes, and it raises revenue for the government.
. A physical limit on the quantity of a good that may be imported in a period. It caps imports directly and gives domestic producers a larger share of the market, but it raises no revenue for the government.
Subsidy to domestic producers. A government payment that lowers domestic firms' costs, letting them undercut imports. Domestic output rises, but the subsidy is a cost to the government.
. A complete ban on imports of a good, or on trade with a particular country, usually for political or health reasons.

Exam tip

Difference between a tariff and a quota (2 marks)

What comes up: a 2-mark question distinguishing two methods of protection, most often a tariff from a quota.

Write (two marks): (1) A tariff is a tax placed on imported goods, which raises their price (1). (2) A quota is a physical limit on the quantity of a good that may be imported (1). A useful extra contrast: a tariff raises revenue for the government, whereas a quota does not.

Watch out: do not say a quota is "a tax on imports"; that is the tariff. The quota restricts quantity, not price directly.