1. Tax on imports is an example of a trade barrier:
- Trade barriers refer to any measures implemented by governments to restrict or regulate international trade. These barriers can take various forms, including tariffs, quotas, subsidies, and technical barriers.
- Tax on imports, also known as import duties or tariffs, is a common trade barrier used by governments to protect domestic industries and increase revenue.
- By levying taxes on imported goods, governments can make foreign products more expensive compared to domestic goods, which can stimulate domestic production and consumption.
- Import taxes can also serve as a source of revenue for governments, as they collect money from importers when goods enter their country.
- The imposition of import taxes can have several effects, such as reducing the quantity of imported goods, increasing the price of imported goods, and providing a competitive advantage to domestic producers.

2. Governments can use trade barriers to increase or decrease foreign goods only:
- This statement is incorrect. Governments can use trade barriers not only to increase or decrease the quantity of foreign goods but also to protect domestic industries, regulate trade flows, and address various economic and non-economic objectives.
- Trade barriers can be used to protect domestic industries from foreign competition by making imported goods more expensive or imposing import quotas.
- Governments may also use trade barriers to address issues such as national security concerns, environmental protection, public health, and cultural preservation.
- Additionally, trade barriers can be employed to regulate trade flows and maintain a balance of trade by controlling imports and exports.
- Governments can strategically implement trade barriers to negotiate better trade agreements, protect strategic industries, or retaliate against unfair trade practices by other countries.
- However, it is important to note that while trade barriers can provide short-term benefits for certain industries or economic sectors, they can also lead to long-term inefficiencies, reduced consumer choices, and retaliatory actions by other countries.

In conclusion, statement 1 is correct as tax on imports is indeed an example of a trade barrier. However, statement 2 is incorrect as governments can use trade barriers for various purposes beyond simply increasing or decreasing the quantity of foreign goods.