Tariff and Non-Tariff Barriers
Tariff barriers are nothing but tax or duty imposed on the goods which are traded to/from abroad. These are imposed mainly to increase country's revenue and to protect local firms from foreign competition.
Non-tariff barriers are the obstacles or trade restrictions to international trade, other than tariffs –such as a quota, embargo, sanction or license–that countries use to further their political and economic goals. These are administrative measures implemented by the country’s government to discourage goods brought in from foreign countries to promote domestically produced items.
Difference between Tariff and Non-Tariff Barriers
S. No. | Tariff Barriers | Non-Tariff Barriers |
1 | tax or duty imposed on imported goods | trade restrictions or obstacles to international trade |
2 | World Trade Organization (WTO) permitted the imposition of tariff barriers to its member nation but at a reasonable rate only | WTO abolished the imposition of import quotas and voluntary export restrictions. |
3 | imposed in the form of Taxes or Duties | imposed in the form of regulations, conditions, requirements, formalities, etc. |
4 | increases the price of imported goods | affects the quantity or price or both of the imported goods. |
5 | controls high profits to importers | importers can make more profits |
6 | to increase revenue of the states | no revenue is accrued by the government |
7 | to protect local firms from foreign competition | to favor domestic firms against foreign suppliers |
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