<p>If a country enacts a program that successfully reduces its imports, eg: </p>

<ul>
<li>A 'buy local' advertising campaign</li>
<li>A program of training mechanics to maintain older cars, rather than buying new imports</li>
<li>An extensive public transport program that reduces the country's oil imports. </li>
</ul>

<p>(These programs aren't reducing imports by imposing tarrifs). </p>

<p>What would the effect on that country's economy be? </p>

<p>Under existing trade rules, are any of these examples likely to breach free trade agreements? </p>

<p>On the face of it, a reduce demand for imported goods would correspond with a lower supply of that country's currency, as they need to sell less of their own currency to buy the imports they need. This would raise the price of their currency, and that would in turn reduce demand for the country's exports. </p>

<p>However, I'm wondering I'm missing another side of the equation here - eg, selling currency for international investment. </p>

CC BY-SA 3.0
2017-09-30T08:06:57.260Z
@dwjohston, should also include reduced competition in the market, and hence high prices.
london
<currency><international-trade><international-economics>
What's the economic effect of a country reducing its imports?
dwjohnston
# What's the economic effect of a country reducing its imports?

(Asked by: username_0 on 2017-09-30)

If a country enacts a program that successfully reduces its imports, eg:

* A 'buy local' advertising campaign
* A program of training mechanics to maintain older cars, rather than buying new imports
* An extensive public transport program that reduces the country's oil imports.

(These programs aren't reducing imports by imposing tarrifs).

What would the effect on that country's economy be?

Under existing trade rules, are any of these examples likely to breach free trade agreements?

On the face of it, a reduce demand for imported goods would correspond with a lower supply of that country's currency, as they need to sell less of their own currency to buy the imports they need. This would raise the price of their currency, and that would in turn reduce demand for the country's exports.

However, I'm wondering I'm missing another side of the equation here - eg, selling currency for international investment.

**Tags:** currency, international-trade, international-economics

> **Comments:**
> **username_1**: @dwjohston, should also include reduced competition in the market, and hence high prices.  

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## 0 answers

