Free trade: occurs when governments do not attempt to restrict what its citizens can buy from another country or what they can sell to another country. While many nations are nominally committed to free trade, they tend to intervene in international trade to protect the interests of politically important groups: instrument of trade policy. The main instruments of trade policy are: tariffs increase government revenues, provide protection to domestic producers against foreign competitors by increasing the cost of imported foreign goods, and force consumers to pay more for certain imports. Import taxes (are): pro-producer, anti-consumer (japan study about 890$ tax/ year, reduce the overall efficiency of the world economy (south korea & rice, subsidies, import quotas, voluntary export restraints, local content requirements, administrative polices, antidumping policies. Example of import controls (cheese quota usa) products relative to domestic products. Example of steel tax in 2002 in usa. Tariffs - are taxes levied on imports that effectively raise the cost of imported.