Tariffs and quotas are the two major types of trade protection.
Tariffs add to the price of a product, while quotas restrict the quantity of imports directly.
Both tariffs and quotas cause a net loss to society, but with quotas the loss is greater as they create monopoly profits for foreign producers. More difficult problems in analysis are posed by non-tariff barriers, such as product standards, environmental regulations, and health and safety measures. Europe is a good case study for the problems these pose, as the European Community is trying to harmonize its laws to create a single market. Another non-tariff barrier is subsidies to the domestic company. This often has the paradoxical effect that efficient firms will be put out of business by inefficient ones, thereby reducing economic efficiency.