Tariff barriers

Tariff barriers are duties imposed on goods which effectively create an obstacle to

trade, although this is not necessarily the purpose of putting tariffs in place. Tariff
barriers are also sometimes known as import restraints, because they limit the
amount of goods which can be imported into a country. Many organizations which
promote trade are concerned about both tariff and non-tariff barriers to free trade,
and a number of nations have agreed to radically reduce their trade barriers to
promote the exchange of goods across their borders.
Types of Tariffs and Trade Barriers
There are several types of tariffs and barriers that a government can employ:
Specific Tariffs - A fixed fee levied on one unit of an imported good is referred to
as a specific tariff. This tariff can vary according to the type of good imported

Ad Valorem Tariffs - The phrase ad valorem is Latin for "according to value", and
this type of tariff is levied on a good based on a percentage of that good's value

Nontariff barriers

Nontariff barriers refer to a range of actions, other than tariffs, that governments
apply to restrict imported goods. Often bureaucratic in nature, the intention of non-
tarriff barriers is to raise the prices of imported products to make them less
attractive to consumers, or to restrict their availability in favor of domestically
produced versions of the same goods. Although most non-tariff barriers violate
World Trade Organization rules, their use is increasing.
Types of non- tariff barriers
Non-tariff barriers to trade include:

Licenses - A license is granted to a business by the government, and allows the
business to import a certain type of good into the country.

Import Quotas - An import quota is a restriction placed on the amount of a

particular good that can be imported.

Voluntary Export Restraints (VER) - This type of trade barrier is "voluntary" in

that it is created by the exporting country rather than the importing one.

Local Content Requirement - Instead of placing a quota on the number of goods

that can be imported, the government can require that a certain percentage of a
good be made domestically. The restriction can be a percentage of the good itself,
or a percentage of the value of the good.

Embargo
A government order that restricts commerce or exchange with a specified country.
An embargo is usually created as a result of unfavorable political or economic
circumstances between nations. The restriction looks to isolate the country and
create difficulties for its governing body, forcing it to act on the underlying issue.

An embargo is the partial or complete prohibition of the movement of merchant

ships into or out of a country's ports, in order to isolate it. Embargoes are
considered strong diplomatic measures imposed in an effort, by the embargo-
imposing-country, to elicit a given national-interest result from the country on
which it is imposed.