The implementation of export subsidies by big countries will lead to a decline in the world market price of subsidized products. Because large countries increase their exports through subsidies, the prices in the international market will drop, and producers will earn less than small countries when subsidizing exports, so the growth of production and exports will be smaller than that of small countries, the growth of domestic prices will be smaller than that of small countries, and the decline of domestic commodity consumption will be smaller.

However, the export subsidies of big countries will do more harm to their own economic interests than those of small countries. Export subsidies of big countries will also aggravate trade frictions, produce terms of trade effects, and lead to deterioration of terms of trade. The government of a big country wants subsidies because it thinks that if the short-term loss of export subsidies or consumer welfare can be exchanged for the expansion of the country's production scale, the scale effect can be obtained, or the long-term benefits such as promoting the country's economic growth can be realized, then this loss may be worthwhile.

The share of big countries in the world market is too large, and the export volume increases after the implementation of export subsidies, which leads to a significant increase in the supply of this commodity in the world market, so the price of the world market drops. On the contrary, the increased export volume of small countries has little influence on the supply in the world market, so it cannot affect the world market price.

1. Like other trade policy measures, export subsidies will have a substantial impact on domestic production and consumption and even the level of social welfare. For producers in subsidized export sectors, export subsidies are equivalent to negative taxes, so the price actually obtained by producers is equal to the price paid by the buyer plus the unit subsidy. Export subsidies have at least two direct effects on the domestic economy:

(1) terms of trade effect-export subsidies can reduce the selling price of export products in the international market, which is unfavorable to domestic terms of trade.

(2) Export expansion effect-the decline in the price of export products can stimulate the increase of exports.

2. The impact of export subsidies on production, consumption, price and trade can be divided into two situations: big countries and small countries. As for big countries, the state subsidizes export commodities mostly because it is encouraging exports-increasing foreign exchange reserves, or expanding the influence of some aspects in the international market. The result is to occupy the market share of the other party (commodity importing country), and even lead to bankruptcy of the importing country.