Tariffs and non-tariff barriers both represent impediments to trade, with tariffs being taxes that are charged on the import of commodities into a country (Sumner et al., 1), and non-tariff barriers being restrictions to imports that do not occur in the form of a tariff (ôNon-tariff barriers to tradeö). Tariffs impede trade by making it too expensive to import goods, and non-tariff barriers impede trade by putting legal restrictions on it that obviate trade transactions that do not meet certain guidelines.
Tariffs have existed for centuries as a means of controlling trade, largely because they provide two important benefitsùrevenue for the government that levies them and improved economic return for the companies protected by them, who would otherwise have faced competition from foreign imports (Sumner et al., 1). Tariffs have advantages for domestic industries, particularly fledgling industries that could be threatened by foreign competition or those that are older and no longer efficient; they also protect domestic producers from foreign ôdumping,ö when a foreign company charges too low a price in the domestic market (Moffatt, 1).
Tariffs are disadvantageous for the consumer, however, who must pay a higher price for imported goods as a result of importers passing along the cost of the tariffs to them (Sumner et al., 1). Furthermore, imposing tariffs on imports is a hindrance to free trade and can be a way of perpetuating industry that by all other measures would already have failed (ôTariffö). For example, when Japanese cars started being imported to the United States, the difference between Japanese high quality and American shoddy quality in cars became evident. Imposing tariffs on the imports in a situation like this merely makes it possible for the domestic goods to continue being made poorly in an artificially maintained industry, rather than encouraging them to improve their quality to
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