Tools for trade restriction include the following;
1. Devaluation: This is a deliberate and legally prescribed reduction in the value of a country’s currency in relation to the currencies of other countries. It increases input prices and reduces export prices thereby making exports cheaper than imports.
2. Imposition of Embargo: Embargo means stopping certain goods from coming into a particular country as a result of one fact or the other. The government places an embargo on some goods to stop their consumption and later on lifts it in order to encourage consumption as the case may be.
3. Import Quota: Quota means the maximum quantities of certain goods that must come in from another country to a particular country. Anybody that imports more than what the government permitted will be penalized.
4. License: Trade is also restricted by mandating anybody that wants to import from other countries to obtain a license. License is issued by the government to those who want to import certain goods into the country.
5. Reduction of Exercise Duties: Excise duties are taxes imposed on locally made goods. The reduction will decrease the prices of local products and increase the price of imported goods. If the price of imported goods is high, people may prefer local products to imported ones.
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