What is the Difference Between Tariff Barriers and Non Tariff Barriers?

Tariff barriers and non-tariff barriers are two distinct mechanisms that countries employ to regulate international trade. Here are the main differences between them:

Tariff Barriers:

• These are monetary barriers in the form of taxes or duties imposed on imported or exported goods.
• Tariff barriers are explicit in nature and imposed in the form of taxes and duties.
• They generate revenue for the government.
• Tariff barriers affect the price of imported goods.
• Monopolistic organizations' prices can be controlled through tariff barriers.
• Profits made by importers can be restricted through tariff barriers.

Non-Tariff Barriers:

• Non-tariff barriers encompass a diverse range of non-monetary measures.
• They are implicit in nature and take the form of regulations, conditions, requirements, formalities, etc..
• Non-tariff barriers do not generate revenue for the government.
• They affect the quantity or price or both of the imported goods.
• Non-tariff barriers are more challenging to quantify and may require complex compliance.

In summary, tariff barriers are monetary barriers in the form of taxes or duties, while non-tariff barriers are non-monetary measures that can have a broader and often less transparent impact on trade. Tariff barriers are typically used to generate revenue and control prices, while non-tariff barriers are used to protect domestic industries and ensure product quality.

Comparative Table: Tariff Barriers vs Non Tariff Barriers

Here is a table comparing the differences between tariff and non-tariff barriers:

In summary, tariff barriers are imposed in the form of taxes and duties on imported and exported goods, while non-tariff barriers are policies and regulations that restrict international trade without the use of taxes. Tariff barriers generate revenue for the government and affect the price of imported goods, whereas non-tariff barriers do not generate revenue and can affect both the quantity and price of imported goods.