International trade significantly impacts domestic policy by influencing economic conditions, employment levels, and regulatory frameworks. As countries engage in trade, they may experience shifts in their labor markets due to competition from abroad. This can lead to policy changes aimed at protecting domestic industries, such as implementing tariffs or subsidies. Moreover, trade deals can compel countries to adopt new standards, affecting environmental regulations, labor rights, and other domestic policies. Consequently, governments must carefully consider international trade agreements to balance between global engagement and domestic welfare.