What are the barriers to international business?

The main and common understandable barrier to international trade is the tariff and non-tariff barriers imposed by the government for national security and protection of the domestic goods produced in the country. The trade restrictions act as an additional expense to the contracting party and if they find a local replacement to avoid this expense.

The standardization and subsidies that are practised in the country often act as a villain in the course of internationalization. The firm will find it difficult to keep up with the international standard if the standard rate is very high. As many commodities are already denominating in the market due to the subsidised rate there is a price advantage for the domestic firm.

The exchange rate difference is one of the main barriers that is faced during internationalization. Some countries do not trade with countries having higher exchange rates. Developing countries due to their lack of specialisation often kept out of internalization. The difference in trade policies also affects international business.