The Presentation is comprehensive list of various tariff and non tariff barriers imposed in International Business.

1. Trade Barriers
in
International Business
By:
Himanshu Sood
Assistant Professor
PCTE Group of Institutes,
Ludhiana

2. Trade Barriers (Instruments of
Trade Policy)
 Trade Barriers classified in two forms: Tariff Barriers and Non Tariff
Barriers
 Tariff: In simplest terms, a tariff is a tax. It adds to the cost of imported
goods and is one of several trade policies that a country can enact. Also
known as custom duties.
Reasons:
a. Protecting Employment.
b. Protecting Consumer.
c. Infant Industry Protection.
d. National Security.
e. Retaliation.
f. Generating Government Treasure

3. Types of Tariff Barriers
 Specific Tariff: 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. For example, a country could levy a $15
tariff on each pair of shoes imported, but levy a
$300 tariff on each computer imported.
 Earlier custom duty on gold was Rs 300 per 10
gms.
 Also depend upon the weight of commodity like
USD 10 for 10,000 Kgs of Wheat.

4. Types of Tariff Barriers
 Ad Valorem Tariffs
The phrase ad valorem is Latin for "according to value“.
 Based upon %age of goods value.
 An example of an ad valorem tariff would be a 15%
tariff levied by Japan on U.S. automobiles. The 15% is
a price increase on the value of the automobile, so a
$10,000 vehicle now costs $11,500 to Japanese
consumers.
 If the price of car would increased to USD 20,000 then
the value in Japanese market would also increase to
USD 23,000.
 Now a days custom duty of 2% is imposed on 10 gms
value of gold in India.

5. Types of Tariff Barriers
 Compound Duty: Combination of Specific duty and
Ad Valorem duty is called Compound duty or Mixed
duty.
 Out of total import of 10000 units of watches, the
custom duty 2000 Units of Watch with value less
than USD 150 would be under specific duty of USD
10 per watch and rest 8000 or above USD 150
value would be charged 10% of the value per unit of
watch.

6. Variable Levy
 A duty that guarantee, the market price of
imports would be same as of produced in
domestic market.

7. Non Tariff Barriers
 All forms of discrimination against imports
other than import duties.
 Qualitative Restrictions and used by
developed economies. Only Quotas are
quantitative.
 The loss revenue resulting to barrier of trade is
known as economic loss.

8. Types of Non Tariff duties
 Quotas: Numerical limits for specific kind of
good that a country will permit to be imported
without restriction during a specified time.
 Ex: EU allowed tariff free quotas on
importation of Bananas from Caribbean and
African Countries on 7,75,000 tons of bananas
and after crossing this limit, tariff of Euro 176
per ton of tariff would be charged.

9. Types of Non Tariff duties
 VER (Voluntary Export Restraint): When Exporter
voluntarily make a restriction on the quantity of
exports.
 This can be in two ways:
- Either on request of importer to protect his domestic
industry or
- Via pressure by importing country.
 Japan imposed a VER on its auto exports into the
U.S. as a result of American pressure in the
1980s. The VER subsequently gave the U.S. auto
industry some protection against a flood of foreign
competition.
By creating a manufacturing set up in foreign country,
the exporting country can overcome this barrier.

10. Types of Non Tariff duties
 Government procurement policies: Here
government is making policies favorable to
domestic country. Tax holidays to specific
industries to be competitive in market.
 Customs and other Administrative Procedures:
- Chinese govt is charging different rate of
duties entering through different ports.
- Japan change its custom procedures very
frequently.

11. Types of Non Tariff duties
 Standards: Whether Indian companies are following ISO
9000 or ISO 14000 system.
 MDH Salmonella Contamination.
 Haldiram’s Snacks banned in US
 Heinz’s Formula 1 banned in China
 GRB Diary’s banned by USFDA because of insufficient
content.
 Canada banned Chayawanprash being high on mercury and
lead in 2005.
 Canadian regulation treat calcium enriched orange juices as
drugs and demand special production approval procedure for
exporters.
 Local content Requirement

12. Types of Non Tariff duties
 Dabur and Patanjali Honey with Antibiotics – banned
in Switzerland and Australia.
 Lifebuoy used for cleaning animal skin.
 Red Bull banned in France, Denmark and Lithuania.
Heart problems and hyper tension.
 Milk and allied products from China was banned
from time to time since 2008. (Melamine Content)

13. Types of Non Tariff duties
 ISF form requisition by USA government.
 Packaging requirement by Australian
government.
 Non usage of Ozone depleting substance by
Italian government.

14. Thank You