However, many people in the United States are wary of open and free international trade. The four most common instruments that governments use to promote trade are subsidies, export financing, foreign trade zones, and special government agencies. A subsidy is financial assistance to domestic producers in the form of cash payments, low-interest loans, tax breaks, product price supports, or some other form. Regardless of its form, it is intended to assist domestic companies in fending off international competitors. Governments often promote exports by helping companies finance their export activities through loans or loan guarantees.
Many companies create facilities in such zones for final product assembly operations.
Special Government Agencies Special government agencies are often created for the purpose of promoting a nation's exports. They can be particularly helpful in obtaining contracts for small and mid-size business that have limited financial resources. They can also help foreign companies find suitable locations within the host country. A tariff is a government tax levied on a product as it enters or leaves a country. Export tariffs, transit tariffs, and import tariffs are all types of tariffs that governments can levy on a product.