This paper explains the economic implications of degree of market power when there is a tariff cuts in international trade. Many studies analyze the impacts of trade policy changes under the assumption of perfect competition. However, we can find the evidence of imperfect competition in literature and empirical data in the Korean dairy industry. Therefore, it is reasonable to assume imperfect competition in explaining the impacts of tariff cuts in trade. This paper develops a trade model with imperfect competition focusing on the Korean dairy industry and illustrates how the consequences of trade policy changes such as tariff cuts can be changed under different assumptions on market structure.