Question

Explain different types of tariff and non-tariff barriers to international trade.

Answer 1

Tariff and non tariff barriers are imposed for various reasons such as –

(i) National Security – Countries enforce tariff and non-tariff barriers to protect the security of the nation. Eg. Defence sector in India

(ii) Retaliation – Government of a country intervenes in the trade policies in order to act as a bargaining tool. Retaliation agreements help countries to allow free trade among them.

(iii) Protecting Jobs – Government aims to protect domestic employment. Domestic employment is affected from foreign competition as domestic industries start to import services from abroad in order to keep up with the competition.

(iv) Protecting Infant industries – Competition form imported goods threatens the infant industries of a country. In order to develop and grow certain industries government may impose heavy tariffs on imported goods to increase prices and help the infant industries.

(v) Protecting customers – Government may levy a heavy tax on goods which are against the welfare of the country and its citizens.  

 

Answer 2

Tariff barriers

• it is refers to the tax imposed on by the import by the country to protect it democratic industries.

non tariff barriers

• it is refers to the restrictions rather than tax imposed on import by the country.