What is an embargo?

An embargo is a government-imposed restriction on trade with specific countries or the exchange of particular goods. It is typically enacted to exert political or economic pressure, often in response to international relations issues or national security concerns. By imposing an embargo, a government can prohibit the import or export of certain products, thus limiting trade interactions with the targeted country. This aligns with the definition of a government trade barrier, making it the correct choice for understanding what an embargo entails.

The other options represent concepts that do not accurately define an embargo. A financial subsidy for local businesses promotes trade and economic support rather than restricting it. A law that allows free trade is the opposite of an embargo, promoting unrestricted exchange of goods. A regular tariff on imports involves taxing goods that enter a country, which is a different mechanism used to influence trade policies but still allows for trade to occur. Thus, the unique characteristic of an embargo as a restrictive measure distinguishes it from these alternatives.