What Is Tariff and Non‑Tariff — And What Are Tariff & Non‑Tariff Barriers?
International trade is rarely as simple as shipping goods from Point A to Point B. Every day, importers and exporters must navigate a complex landscape of costs and regulations — including tariffs and non‑tariff barriers (NTBs). Understanding these terms is crucial for any business operating globally.
Let’s break down what these terms mean — and how the Captain Tool from CargoTrans can help you stay ahead of them.
What is a Tariff?
A tariff is a tax or duty imposed by a government on imported goods. It’s a direct fee, collected at customs, meant to:
- Raise the cost of foreign goods, making domestic products more competitive.
- Generate government revenue.
- Protect domestic industries from foreign competition.
Tariffs can be expressed in different ways:
- Ad valorem tariffs — a percentage of the good’s value.
- Specific tariffs — a fixed amount per unit (e.g. $5 per gadget).
Because tariffs are straightforward and visible, companies often anticipate and account for them in pricing, cost planning, and customs declarations.
What Are Non‑Tariff Measures / Non‑Tariff Barriers (NTBs)?
A non‑tariff barrier (also known as a non‑tariff measure, or NTM) refers to any trade restriction that is not a customs duty. Rather than charging a direct tax, these barriers come in the form of regulations, rules, quotas, standards, or procedural requirements that restrict or complicate international trade.
Examples include:
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Import/export quotas — limits on how much of a product can be imported or exported.
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Licensing requirements — mandatory approvals for certain goods to be imported or exported.
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Technical, safety, or sanitary standards — product compliance requirements for labeling, manufacturing, or testing.
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Rules of origin and customs valuation rules — guidelines on where a product is made or how its value is determined for customs purposes.
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Import bans, embargoes, export subsidies, and other trade policy measures — restrictions used to protect domestic markets or respond to foreign trade actions.
Unlike tariffs (which are direct and explicit), non‑tariff barriers are often less transparent, more unpredictable, and significantly more burdensome from a compliance standpoint. They can affect not only cost but also timing, documentation, logistics, and the ability to enter certain markets altogether.
Tariff Barrier vs. Non‑Tariff Barrier — Key Differences
- Aspect
- What it is
- How it impacts trade
- Transparency
- Government revenue
- Ease for businesses
- Tariff Barrier
- Raises cost per unit, affects pricing
- Usually clear and predictable
- Generates customs revenue
- Easier to calculate and plan around
- Ease for businesses
- Non‑Tariff Barrier
- Can limit volume, block market entry, cause delays, or add burdens
- Often complex, variable, and hard to anticipate
- Does not typically generate revenue, but increases compliance costs
- Harder to manage, requires in-depth regulatory knowledge
- Ease for businesses
Why Non‑Tariff Barriers Are Often More Disruptive Than Tariffs
Over the years, many countries have reduced or eliminated traditional tariffs through trade agreements. However, non‑tariff barriers have steadily increased. These barriers are frequently used as subtle tools to protect domestic industries or regulate trade more tightly.
Because NTBs can affect multiple layers of trade — including compliance, origin verification, classification, documentation, and customs clearance — they introduce a high level of uncertainty and cost. For companies without dedicated compliance resources, these risks can escalate into shipment delays, penalties, or even total shipment loss.
For global supply chain and logistics teams, this often results in:
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Customs clearance delays affecting delivery timelines.
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Increased costs due to testing, certifications, or rework.
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Risk of rejection, seizure, or re-export of goods.
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Complications when sourcing from multiple countries with different regulatory regimes.
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