Trade barriers are restrictions imposed by governments on trade with other countries.
Trade barriers make international trade more difficult and expensive. They are usually made to protect domestic manufacturers.
Trade barriers take the form of tariff or non-tariff barriers.
The Cambridge Dictionary defines a trade barrier as: “Something like an import tax or a limit on the quantity of a good that can be imported that makes international trade more difficult or more expensive.”
Tariffs
Customs duties are taxes or duties levied on imported goods. The purpose of tariffs is to raise the price of imported goods to at least the current domestic price, or to increase government revenue.
According to the World Trade Organization (WTO): “Customs duties on imported goods are called tariffs. Tariffs give a price advantage to domestically produced goods over similar imported goods, and they increase government revenue.
Non-tariff barriers to trade
According to the South African Development Community (SADC), “a non-tariff barrier is any barrier to international trade that is not an import or export tax. They can take the form of import quotas, subsidies, customs delays, technical barriers or other systems that impede or impede trade.
Non-tariff barriers to trade include:
- subsidies – money given directly by the government to domestic businesses, farmers, organizations and other entities to encourage production, increase exports, and protect domestic businesses.
- embargo – a formal ban on trade with a particular country.
- import license – a permit that allows the import of a certain amount of goods for a certain period of time.
- export license – grants the exporter the right to export a specific amount of a product to a particular country.
- import quota – a limit on the amount of goods that can be imported into a country in a given period of time.
- currency devaluation – devaluation can improve a country’s export competitiveness and also make imports more expensive for consumers.
When one country imposes trade barriers on other countries, there is a risk that the countries involved will retaliate with their own trade barriers. This could lead to a so-called trade war.
