ABSTRACT
This chapter deals with the forms of trade controls. Trade controls can be classified into two major categories: those trade controls that directly influence prices, such as taxes and subsidies, and those that directly influence quantities, such as quotas and exchange controls. Taxes or subsidies, as well as quotas, may be imposed on exports or imports, so there are really four trade controls operating through prices and two trade controls operating through quantities. Since subsidies are merely negative taxes, what has been said in relation to export and import taxes necessarily holds for export and import subsidies as well. Quotas, as opposed to taxes and subsidies on imports and exports, control the absolute quantities of exports or imports. Subsidies may be imposed on an ad valorem, specific, or combined basis; the equivalence between ad valorem and specific rates holds for subsidies as well.
