We know trade barriers are settled to safeguard our industries and employment, but they can also lead to some difficulties in trade like rising prices for consumers, economic inefficiency, and more. Trade barriers always come to be a crucial factor for international trade debate and balancing all these factors is an exceptional challenge for international trade policy. 

Types Of Trade Barriers

There are commonly 2 types of trade barriers, tariff and non-tariff trade barriers. Industrialists and others may have divided Non-tariff trade barriers into 6 sub-divisions or more than six categories. 

Tariff Barriers

When the government puts tariffs on foreign goods, they make them more expensive for people in the country or for domestic consumers.

Tariffs Based On Value: These are charged as a portion of the value of the imported goods. For instance, a 10% ad valorem tariff on a $100 foreign good would mean that it was taxed $10.

Certain Tariffs: These are fees that are charged based on the amount of the purchased goods. Take the case of a $5 specific tax on a box of imported oranges as an example.

Compound Duties: These are a mix of specific and ad valorem duties.

Non Tariff Barriers

Non-tariff barriers are far different from normal tariffs as they include a wider range of rules that make it harder to import or export supplies and products from the country. Some examples are limits, license requirements, health and safety rules, and government aid for Domestic farmers. 

Top 5 Trade Barriers Impacting Export Operations Globally

Quotas: Quotas are limits on how much of a certain product or supply can be brought inside the country from international borders during a certain time period. This limits the amount you can sell in a certain area.

Prohibition: There are times when trade with certain countries is not allowed because of political or economic issues.

Standards: Technical, health, and safety norms can be used to stop imports. Products & supplies that don't meet the required demands are not allowed to enter the country.

Subsidies: When domestic producers get financial help to promote their products, they make it difficult for foreign products to compete.

Why Does The Government Use Tariffs & Trade Barriers?

Tariffs are often made to protect new industries and economies that are still growing, but they are also used by economies that are already well-developed to protect their industries.

Here are 3 reasons why these barriers are implemented:

To Protect Domestics Business

By using tariffs and quotas, the government raises the prices of imports so domestic industries & businesses can better compete on price with international goods. 

Ensure Trade Quality & Safety

Non-tariff barriers (NTBs), such as safety guidelines, make sure that imported goods meet a certain level of quality, which protects consumers' domestic trading and does not affect their businesses much.

Maintain National Securance

Developed countries like the USA & China also use trade or export barriers to protect businesses they see as strategically important. Defence businesses are often seen as very important to the government and are therefore well protected.