Explain the difference between tariff and non-tariff barriers.

Tariff and non-tariff barriers are two types of trade barriers that countries impose to restrict or regulate international trade. The main difference between these two barriers lies in their nature and the methods used to implement them.

Tariff barriers, also known as import duties or customs duties, are taxes imposed on imported goods or services. These taxes are levied at the border when the goods enter the importing country. Tariffs can be specific (a fixed amount per unit) or ad valorem (a percentage of the value of the goods). The purpose of tariffs is to increase the price of imported goods, making them less competitive compared to domestically produced goods. Tariffs generate revenue for the government and protect domestic industries from foreign competition.

On the other hand, non-tariff barriers refer to various measures other than taxes that countries use to restrict trade. These barriers can take different forms, such as quotas, licensing requirements, technical standards, subsidies, embargoes, and administrative procedures. Non-tariff barriers are often more complex and diverse compared to tariffs. They can be used to limit the quantity of imports, control the quality or safety of imported goods, or protect domestic industries from foreign competition. Non-tariff barriers can be more difficult to measure and quantify compared to tariffs, as they involve a wide range of regulations and policies.

While tariffs are more straightforward and transparent, non-tariff barriers can be more subtle and indirect. They can be used to create obstacles for foreign companies, making it harder for them to access the domestic market. Non-tariff barriers can also be used as a means of protecting domestic industries without explicitly imposing taxes on imports.

In summary, the main difference between tariff and non-tariff barriers is that tariffs are taxes imposed on imported goods, while non-tariff barriers encompass a broader range of measures and regulations used to restrict or regulate international trade. Both types of barriers aim to protect domestic industries, but they differ in their methods of implementation and the effects they have on trade.