Disadvantages of International Trade


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  1. Foreign trade dependence creates serious difficulties for a country, especially in times of war when foreign trade becomes impossible.
  2. Because of foreign trade, a country may recklessly exhaust her limited natural resources for the purpose of export without thinking of her own future needs.
  3. Foreign trade gives rise to foreign competition. Foreign competition may ruin  domestic industries, especially small and cottage industries which are unable to face such competition.
  4. Foreign trade may encourage the importation of luxury goods which are not useful to the masser.
  5. Because of foreign trade, some developed countries may resort to the practice of dumping their goods in under-developed and developing countries.
  6. Foreign trade speacialisation resulting from the foreign’s trade, a country may develop a certain sector of her economy, neglecting other sectors.
  7. Foreign trade may cause serve balance of payments problem, and a country may be forced to borrow from international sources. Huge foreign debts may impair, a country’s capacity to import goods.
  8. Foreign trade is likely to ruin an economy which exports only raw materials to other countries.
  9. Foreign trade leads to international competition and rivalry, and sometimes, leads to international frictions and wars.
  10. Foreign trade dives an opportunity to foreigners to intervene in the domestic affairs of a country.
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