Trade barriers are measures governments or public authorities impose to make imported goods or services less competitive than locally produced goods and services. These barriers can take many forms, but the two most common are tariffs and non-tariff barriers. Let's dive into each.
A tariff is a tax or duty levied on goods when they cross international borders. Typically, tariffs are imposed on imported goods, but occasionally, they may be imposed on exports. Tariffs increase the cost of imported goods, making them more expensive for consumers and potentially protecting domestic industries from foreign competition.
Non-tariff barriers (NTBs) are trade restrictions that do not involve taxes or duties. These barriers can include quotas, embargoes, sanctions, levies, and other restrictions. NTBs can be more subtle than tariffs but can still significantly impact international trade.
| Feature | Tariffs | Non-Tariff Barriers |
|---|---|---|
| Definition | Tax or duty on imported/exported goods. | Trade restrictions that do not involve taxes. |
| Mechanism | Increases the price of imported goods. | Restricts the quantity or imposes conditions on trade. |
| Examples | Import duties, export taxes. | Quotas, embargoes, standards, licensing. |
| Transparency | More transparent; the tax amount is usually clear. | Less transparent; the impact can be indirect and hard to quantify. |
| Revenue Generation | Generates revenue for the government. | Typically does not generate revenue directly. |
| Impact on Price | Directly increases the price of imported goods. | Can indirectly affect prices through supply restrictions or compliance costs. |
| Ease of Negotiation | Can be easier to negotiate and reduce through trade agreements. | Often more complex and politically sensitive to negotiate. |
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