Which is considered a non-tariff barrier?

A non-tariff barrier refers to any restriction on international trade that does not involve applying tariffs. Licensing requirements are a clear example of this type of barrier. They involve regulations that a company must comply with in order to import or export goods, which can create hurdles for businesses seeking to enter a new market. By requiring specific licenses, governments can control and limit the volume of certain goods, thereby influencing trade flows without imposing a direct tax on imports or exports.

In contrast, tariffs are taxes applied directly to goods being imported or exported, making them a direct financial barrier. Quotas limit the quantity of goods that can be traded, while subsidies provide financial support to domestic producers, which can affect international competition but are not classified as non-tariff barriers since they don't impose direct restrictions on the import/export process itself. Understanding these distinctions is crucial for comprehending international trade dynamics and how different measures can impact market access and competition among global businesses.