Tariff and non-tariff barriers that wholesalers face in international trading

International trade refers to the exchange of goods and/or services across the borders between different countries located anywhere on the globe. Import trade increases the number of products in a country that domestic customers can choose from. Therefore, it decreases the cost of particular category products and also allows domestic Manufacturers to ship their products to other countries via export trade. It seems to be an ideal situation for wholesale traders to grow business. rnHowever, free trade is not a widely accepted situation though it is very beneficial for wholesalers, manufacturers, suppliers and all other parties involved in the venture. Let us observe the most common barriers that hinder international trade despite so many benefits. rnThe most commonly used barriers to international trade are called tariffs. Different types of tariffs, taxes and duties are imposed on the imported goods by the importing country just to protect the domestic corporate sector from foreign competitors. Few tariff and non-tariff barriers are given as follows: ● Tariff Barriersrn● Non-Tariff Barriersrn● Import Licensesrn● Import Quotasrn● Voluntary ConstraintrnTariff BarriersrnTariffs are taxes, duties and quotas imposed on imported wholesale products by the governments. This barrier increases the price of imported wholesale products. Resultantly, consumers have to pay more for the same item. Due to the tariff barrier, import volume decreases but overall prices of imported products increase. Therefore, domestic economy gets a boost and people pay more attention towards domestic products. It is the best way to promote local wholesale traders and wholesale business. rnNon-Tariff BarriersrnNon-tariff barriers are imposed to restrict imported wholesale products but taxes and regulations are not directly imposed on imports. Imports are hindered by quantity, product quality, rising import standards and certain other restrictions that act like trade barriers. Due to this, imported wholesale products are restricted in domestic market but high prices are charged for imported items. rnImport LicensesrnImport licenses are actually non-tariff barriers that are imposed on imported items. It is a document issued by governments to authorize certain kinds of imported wholesale products within the country. Government can put restriction in different forms such as define as to what should be imported and in what amount. Governments also issue licenses to authorize certain dealers. Each license specifies the volume and limits the import quantity as well. These licenses can be sold to importing companies at competitive price. Due to these discriminations, government saves domestic wholesalers and traders to fall in competition with foreign traders. rnImport QuotasrnLicensing of foreign trade is mostly related to quantitative restrictions on wholesale products in form of quotas. A quota is a type of restriction that is imposed to set a physical quantity limit on certain goods to be imported in the country within the specified time. It is also used as a trade barrier to protect local producers of the same product against the imported item at the expense of consumers. According to experts, it is less efficient and leads to smuggling and corruption of specific goods. rnVoluntary ConstraintrnMostly a demand competition starts between domestic wholesale products and imported products, when imported products are more in vogue and better in quality but a bit costlier than domestic items. Therefore to save the domestic economy, a country will voluntarily put restriction on imports.