Long and Stahler (2009) examine the impact of privatization on strategic trade policy in an international mixed oligopolistic market with a non-linear demand function, however, the paper does not consider the presence of domestic private firms, so there is no cost-saving effect of privatization policy. In view of this, this paper takes the presence of domestic private firms into account. According to this paper, the cost-saving effect plays a key role, and the cost-saving effect of privatization policy will make the equilibrium price of the market, optimum tariff rate, and social welfare related to the degree of privatization rather than independent of each other under the optimal trade policy, and social welfare will increase with the increase of the degree of privatization. Therefore, the optimal privatization policy should be fully privatized. The optimal subsidy rate and the degree of privatization are not monotonically incremental in nature. All of these results are different from the findings of Long and Stahler (2009).