Virtually all developing countries at various times abandon laissez-faire policies with respect to international trade in order to pursue government-directed strategies of industrialization. Abandonment of free trade always means that private firms and consumers no longer base their economic decisions on world prices of goods but, rather, on distorted domestic prices that alter production and consumption decisions. For example, imposition of a tariff on automobile imports raises the domestic price of automobiles in comparison with other goods in the economy. The higher relative price of automobiles has two effects: first, consumers purchase fewer automobiles because of the higher price, relative to other goods they can buy; and, second, domestic production of automobiles increases in response to the higher selling price while domestic production of other goods falls, as labor and physical capital shift away from the other sectors and toward the automotive sector.