Tariff Barriers and Non-Tariff Barriers

Tariffs are one of the key tools used by nations to impose trade barriers as part of their geoeconomic policies. In other terms, tariffs are the customs duties that governments impose on merchandise imports. Other significant tools that impede the movement of goods and services include non-tariff barriers, which are in addition to tariff barriers. The fundamental driver of protectionism between nations is these tariff measures. In other words, nations utilize tariffs to shield native producers and consumers from overseas rivalry. Because the protection of producers and consumers protects both local production and prestige in the foreign market.

Knowing the appropriate product code is crucial when it comes to tariffs because customs charges are calculated using the GTIP code. Before choosing to enter a given country, exporters need to be aware of both tariffs and non-tariff restrictions. It is also a crucial factor to consider when performing target market research because it has a direct impact on how importers make purchases. Undoubtedly, businesses prefer to import goods from nations with minimal or no non-tariff and non-tariff trade restrictions. For goods that cannot be replaced, the importer must endure stringent import conditions, even when it makes more sense from a material standpoint. So, knowing everything there is to know about tariffs and non-tariffs puts you one step ahead.

What is a Tariff Barrier?

Many countries are experts in production and their acquisition is limited by their natural resources and their ability to produce certain goods and services.  To meet the needs and desires of their citizens, they decide to trade with other nations. However, trading partners don’t always reasonably conduct their business. 

Every nation has its geographical advantages and drawbacks in terms of policies. Competition between nations and a host of other causes can also cause issues between trading partners. Tariffs are relevant in this situation. Governments deal with trading partners they don’t agree with by imposing tariffs. A tariff is a form of tax that a nation imposes on imports of goods and services to preserve competition.

But it is not entirely correct to think of tariffs only as a form of taxation. Tariff barriers are chains of policies implemented by governments to protect themselves. Tariff barriers also called border taxes, provide revenue to the government in the form of taxes and fees. In addition, imposing tariffs makes the price of imported products affordable to maintain the country’s independence from imports. Also, nations that do not comply with the government’s foreign policy are penalized using this type of trade barrier policy.

A government has the right to impose tariff restrictions in several different ways. Tariffs are named according to their purpose. Some of the most common tariff barriers include:

  • Ad-Valorem Tariffs
  • Particular Tariffs
  • Specific Tariffs
  • Complex Tasks
  • Protective Tariffs
  • Licenses
  • Duties for Voluntary Exports
  • Transit Tasks

What is a Non-Tariff Barrier?

By definition, non-tariff trade barriers impose restrictions on the import or export of goods and services in methods other than the imposition of tariffs. Non-tariff barriers are restrictive laws that, in the absence of taxes, make it difficult or expensive to import or export a specific good or service.

Trade restrictions known as non-tariff barriers do not involve paying taxes or duties. In other words, aside from the actions performed in the tariff policy, these barriers are obstacles to trade in the import of foreign goods. Non-tariff barriers are a type of “non-tax” policy, to put it succinctly and simply.

A non-tariff barrier policy may occasionally have a similar impact as a tariff barrier. The application of restrictions in this instance, however, is limited to prohibitions, conditions, and procedures, which complicate and limits the entry of foreign goods. Non-tariff barriers, however, are not used in conjunction with tariff obstacles.

We can list some of the non-tariff barriers as follows:

  • Embargoes, 
  • Voluntary Export Restrictions,
  • Quotas,
  • Technical Trade Barriers,
  • Licensing,
  • Responsibilities against Dumping,
  • Anti-Competitive Duties,
  • Safeguards,
  • Public Procurement,
  • Formalities and Procedures.

The Difference Between Tariff and Non-Tariff Barriers 

Even while each tariff and a non-tariff barrier is distinct in its own way, they are nonetheless significant government-imposed regulations that every trading organization should be aware of. Companies need a thorough knowledge of these topics since they will come across regulations unrelated to their economic circumstances. Commerce restrictions are a helpful tool for shielding home producers from competition on international markets, but they impede trade in products and services on the world market. Let’s examine the distinctions between tariff and non-tariff barriers:

Barrier Intent

The tariff barrier benefits the nation in two ways. The first benefit is that it shields home producers from the damaging consequences of international competition. Second, it offers the state an extra source of revenue. On the other hand, a non-tariff barrier safeguards native manufacturing firms while assuring that foreign competitors can access the country’s market only after fulfilling specific requirements or formalities.

Implementation Method

Taxes and levies are used to impose tariff barriers. Conditions, voluntary export duties, various formalities, and other non-tariff obstacles make up the limitations.


While tariff barriers are explicit, non-tariff barriers are implicit.

Government Revenue Generation

Due to taxes and duties in a tariff barrier, the government has the power to produce income. On the other side, the government has no opportunity to collect money when there is a non-tariff barrier.

Impact of Imposing Trade Barriers

The price of imported goods is significantly impacted by tariff barriers due to the imposition of taxes and charges. In other words, the cost of these things tends to skyrocket. Non-tariff barriers have an impact on both the quantity and price of imported commodities.

Groups that are Monopolistic Forming

While non-tariff restraints give monopolistic groups the chance to make significant profits, the application of import tariffs and levies in the context of tariff barriers diminishes the likelihood of monopolistic emerging organizations.

Possibility of Making Money

The chances of importers profiting greatly are frequently reduced by tariff barriers. With non-tariff barriers, importers can simply generate and collect good profits.

Direct or indirect effects of restrictions

While tariff barriers do not allow and indirectly restrict the import of goods, non-tariff barriers directly restrict the import of goods.

The Simpleness of Tariff Implementation

Implementation of the tariff barrier is easy. This is so that there is no need to assign formalities, licenses, or quotas separately since legislators have already set these constraints in the form of flat rates. There are authorities with various responsibilities for implementing a non-tariff barrier. Such delegated responsibilities are difficult to implement because they can result in political corruption and meddling.

Time of Impact

Any modification to the tariff barrier policy immediately and significantly impacts the amount of merchandise imported from other nations. On the other hand, it takes time for the non-tariff barrier policy changes to be implemented and go into effect.

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