International Financial Institutions and Global Business Strategies Practice Test

Escalation of trade barriers between nations is captured by the idea of trade wars and protectionism. Protectionism refers to policies that shield domestic industries from foreign competition, such as imposing higher tariffs, quotas, or subsidies. When one country raises barriers, trading partners often retaliate with their own measures, creating a cycle of increasing restrictions—this is a trade war. The other options describe different realities: globalization involves broader economic integration and typically reduced barriers; tariff reduction means lowering barriers rather than raising them; free trade implies minimal or no barriers. So the term that best describes the intentional increase and retaliation of trade barriers is trade wars and protectionism.