IAI Actuarial Core Principles · Business Economics · Importance of international trade
Which of the following is a non-tariff barrier to trade?
A quota on the number of imported cars is a non-tariff barrier because it limits quantity rather than taxing imports. Ad valorem, specific and countervailing duties are all forms of tariff, since each works by charging a tax on imported goods.
- AA quota limiting the physical quantity of imported carsCorrect
- BAn ad valorem duty of 10% on imported cars
- CA specific duty of ₹5,000 per imported car
- DA countervailing duty equal to a percentage of the import price
- A customs levy collected at the port on the value of goods
Explanation
A quota restricts quantity directly and is a non-tariff barrier. The other options are all taxes on imports, i.e. tariffs, whether specific or ad valorem.
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