International trade

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International trade is when countries agree to allow their businesses to exchange products or resources, also known as importing and exporting goods. Businesses in one country will then buy (import) or sell (export) goods to the businesses in other countries. Alternatively, the government of a country will sometimes directly buy from (or sell to) the government of another country. When import of goods effects the prices of those same goods in the receiving country, that country's government may pass special laws to regulate the trading. The leaders of some countries may then try to use protectionist methods such as high tariffs to discourage import. As a form of punishment or political pressure, some countries may impose embargoes that prevent trading altogether with a target country. To promote relations, countries may agree to trade with each other without protectionism. This is called "free trade". Free trade reduces trade barriers in exporting items.