Both tariff and quota are used in the context of international trade and many people use both the terms interchangeably, but the fact is that they both are completely different things the only similarity between the two is that both are used for discouraging imports and promoting domestic goods and industries. Given below are some of the differences between tariff and quota –
- While tariff is imposed by the governments in order to make goods expensive which are coming from foreign countries while a quota refers to maximum quantity which can be imported from foreign countries.
- Tariff results in more income to the government while quota does not result in extra income for the government.
- There is no limit on the quantity of goods which can be imported from foreign countries in case if there is tariff on that good but in case of quota in no circumstance one can import more than stipulated quaintly of good in case if there is quota on that good.
- A tariff results in rise in price of a good which consumer has to bear if he or she buys that good while quota does not result in any rise in price.