Tariff vs Non-Tariff
Tariff:
- Tariffs are taxes imposed on imported goods, making them more expensive for consumers.
- They are a form of trade barrier used to protect domestic industries from foreign competition.
- Tariffs can be specific (a fixed amount per unit) or ad valorem (a percentage of the value of the imported goods).
- They are usually imposed by the government to generate revenue or to protect domestic industries.
- Tariffs can lead to a decrease in imports, an increase in domestic production, and higher prices for consumers.
Non-Tariff:
- Non-tariff barriers refer to various restrictions other than tariffs that countries use to restrict imports.
- Non-tariff barriers can include quotas, import licensing requirements, subsidies, product standards, and administrative procedures.
- These barriers are often used to protect domestic industries, ensure consumer safety, or prevent the spread of diseases.
- Unlike tariffs, non-tariff barriers do not involve the imposition of taxes on imports.
- Non-tariff barriers can be more difficult to quantify and address compared to tariffs.
In conclusion, while tariffs are taxes imposed on imported goods to make them more expensive, non-tariff barriers refer to various restrictions other than tariffs that countries use to restrict imports. Both types of barriers can have significant impacts on international trade and the global economy.