A non-tariff barrier is any measure other than high import duties or tariffs employed to restrict imports. It is a form of restricted trade where barriers to trade are set up and take a form other than a tariff.
Non-tariff barriers arise from different measures taken by governments and authorities in the form of government laws, regulations, policies, conditions, restrictions or specific requirements, and private sector business practices, or prohibitions that protect the domestic industries from foreign competition. Two such measures are direct price influences and indirect price influences. Direct price influences include export subsidies or drawbacks, exchange rate manipulations, methods of imports valuation, custom charges, lengthy custom procedures, establishment of minimum import prices, unreasonable standards and inspection procedures. Indirect price influencers include things such as import licensing.
Non-tariff barriers are another way for an economy to control the amount of trade that it conducts with another economy, either for selfish or altruistic purposes. Any barrier to trade will create an economic loss, as it does not allow markets to function properly. The lost revenues resulting from the barrier to trade is called an economic loss. Non-tariff barriers that include quotas, levies, embargoes, over-valued currency, employment laws, product classification and other restrictions are frequently used by large and developed economies.