Looking Beyond Tariffs

Tariffs have dominated headlines since President Trump's second term, but there are other tools governments use as trade barriers for foreign goods. These are known as non-tariff barriers (NTB).

Anti-dumping Duties - Anti-dumping duties are levied on products for which the price is lower than the cost of production or the price charged in the domestic market.

Countervailing Duties - These duties are charged on products for which a foreign government has subsidized the domestic industry/company through grants, preferential tax and interest rates, or other forms of economic support.

Quotas - Quotas limit the amount of product that can be imported into a country. Quotas can be a hard quantity cap or increased duties after certain import quantities have been reached.

Regulatory Hurdles - There are many possible ways regulation can restrict imports. For example, import/export licensing & permit requirements, specification requirements (including health, safety, environmental, and technical standards), labeling requirements, and local content requirements. Products and services (particularly in the technology sector) can be completely blocked for national security or other protectionist reasons.

When engaging in international trade, it is important to understand import and export requirements in addition to the product's costs and tariffs. You may encounter unexpected costs, customs delays, or even total loss due to import restrictions. It is also important to look deeply into the trade relationships when forming policy positions. Looking only at tariffs neglects the other aspects in which countries may restrict trade.