Distinguish between tariff and non-tariff barriers.
Difference between Tariff and Non Tariff barriers .
Tariff barriers means a tax on imported goods to restrict imports in the country. A tariff barriers is a price based policy to restrict trade because it changes the price of import paid by the importer.
Tariff or customs duty may be called a tax imposed by a government on physical goods as they move into or out of the country. Tariff barriers are levied either purely to collect revenue to meet the government expenditure or to protect domestic industries against foreign competition.
As against the tariff barriers, non-tariff barriers are government policies and administrative practices that regulate or restrict the foreign trade.
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Non-tariff barriers are quantitative restrictions which influence the volume of trade unlike tariff barriers, non-tariff barriers impose absolute limitations upon foreign trade and inhibit market responses. The non-tariff barriers are numerous. Following are some common excuses offered by a country to impose non-tariff barriers:
- Human rights.
- Damage to environment.
- Health considerations.
- Injury to domestic industries.