Quotas, Subsidies and Non-Tariff Barriers

Tariffs are only one tool of protection. An import quota caps the quantity of a good that may enter; because supply is restricted, prices rise, and whoever holds the import licenses captures the extra profit. In the 1980s Japan agreed to 'voluntary' export restraints on cars sold to the United States, which raised prices and led Japanese firms to shift toward more expensive models and build factories in America.

Subsidies support domestic producers directly, as with farm support under the European Union's Common Agricultural Policy and the United States' farm programs, and can let them undercut foreign rivals. Other non-tariff barriers include product standards, licensing rules and slow customs procedures. Some standards protect health and safety legitimately, so trade law tries to separate genuine regulation from disguised protection. As tariffs have fallen, these less visible barriers have become a larger focus of trade negotiations.