Import Restrictions

• Import restrictions are generally thought of as economic policies that give companies, businesses, merchants and consumers the disincentive to purchase imports. "Imports" are defined as goods purchased from industries found in other countries. Arguably, through trade agreements, some imports are cheaper to purchase than goods created in a home country. One example is the North American Free Trade Agreement. This agreement eliminated many trade restrictions between Canada, the U.S. and Mexico, allowing merchants and businesses to utilize capital and import more freely between the three countries -- without state intervention.
  
  

Tariffs

• A well-known import restriction is the tariff. Tariffs are taxes levied against a company that purchases imports. In a sense, a tariff is a sales tax. For example, if a U.S. merchant imports $1 million worth of food products from Denmark, and the U.S. has a 10 percent tariff on Danish food products, then the merchant would have to pay $1.1 million -- an extra $100,000 taxed.
  
  

Possible Benefits

• Import restrictions can have benefits to some countries depending on their economic situation. The Levin Institute at the State University of New York argues that import restrictions may help GDP slightly, because most states strategically and purposely impose import restrictions to help a domestic industry. For example, if it is cheaper for car merchants to purchase Japanese cars, then a state might impose high tariffs on Japanese cars. A state might do this hoping that merchants and consumers shift their spending power toward purchasing domestic cars. Overall, shifting demand toward a domestic industry may be seen as a way to power up GDP since more goods would be produced and sold within a country.
  
  

GDP Reduction

• Importing goods without restrictions may lower the price of those goods globally, according to the National Council on Economic Education. The reason is that industries in any country can create and sell the goods on the international market, and can actively compete to sell those goods at a lower rate than other countries. However, when a state imposes import restrictions, then the price of domestic goods in that country either remain higher than the import average or go up -- because demand is shifted toward the domestic market. This makes it harder for merchants or consumers to purchase goods at the cheapest possible price from a foreign industry. This can curve spending and investment, and hence, lower GDP since more money is needed by merchants to purchase domestic goods over imported goods.