Suppose the Canadian government began subsidizing wheat farmers by paying them $25 per bushel of wheat produced. According to existing international trade agreements, other countries would be allowed to react to this subsidy by imposing a

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Countervailing duty is a tariff imposed by a country on imported goods that have received subsidies in their country of origin. In this case, if the Canadian government began subsidizing wheat farmers, other countries can react by imposing a countervailing duty on Canadian wheat imports to neutralize the competitive advantage created by the subsidy. A quota, non-tariff barrier, trade diversion, and VER (Voluntary Export Restriction) are all ways of restricting imports, but they are not specifically targeted at addressing subsidies.

Suppose the Canadian Government Began Subsidizing Wheat Farmers by Paying