What are "non-tariff barriers"?

Non-tariff barriers refer to trade restrictions that countries impose that do not involve the use of tariffs or taxes on imported goods. These barriers can take various forms, including quotas, import licensing, subsidies, and standards or regulations that favor domestic over foreign products.

The significance of non-tariff barriers lies in their ability to control the volume and type of goods that can enter a market while skirting the straightforward and often more transparent methods of tariff-based trade regulation. By using non-tariff barriers, governments can protect their domestic industries and limit foreign competition in nuanced ways that may not be immediately apparent, thus creating various hurdles for foreign businesses seeking to enter local markets.

This understanding of non-tariff barriers is crucial as they can affect international trade dynamics significantly, influencing how businesses strategize their market entry and operational decisions in foreign territories. The nature of these barriers means they can often be more complex and challenging to navigate than simply understanding tariff rates.