What is the difference between a tariff and a quota?

What is the difference between a tariff and a quota Introduction: The World of Trade Policies Hello everyone! Welcome to our video on tariffs and quotas, two key tools in the realm of international trade. As countries navigate the complexities of global commerce, understanding these policies becomes crucial. So, let's dive in! Defining Tariffs: Taxing Imports Tariffs, in essence, are taxes imposed on imported goods. They are typically levied by the importing country's government, adding to the cost of the product. The primary objective of tariffs is to protect domestic industries, as they make imported goods relatively more expensive. By doing so, tariffs can provide a competitive edge to local producers, stimulating their growth. Exploring Quotas: Limiting Imports While tariffs focus on taxation, quotas revolve around quantity restrictions. A quota sets a specific limit on the quantity of a particular product that can be imported within a given time frame. This limit can be in the form of units, weight, or any other measurable criteria. The aim of quotas is to control the inflow of goods, ensuring that domestic industries are not overwhelmed by foreign competition.