As Wall Street Continues to Fall, We Asked: Just How Bad Are China's Non-Tariff Barriers?

China's non-tariff barriers (NTBs) are a significant hurdle for international trade, often more impactful than its tariffs, which have dropped considerably over the years (averaging around 3.5% today).

NTBs are tough to quantify precisely because they're not as straightforward as a tax-think opaque regulations, sudden inspections, or licensing rules that seem to shift depending on who's asking. But their effects are real and hit hard, especially for countries like the U.S. that rely on exporting agriculture, tech, and manufactured goods.

Take the U.S.-China trade war as a case study: from 2018 to 2019, NTBs were blamed for half the drop in U.S. exports to China. Soybeans, a massive U.S. export, got crushed-imports fell by about 50% during the worst of it, thanks to "inspections" for pests and other vague delays that didn't hit other countries' shipments as hard. That's not random; it's targeted.

Research pegs the added cost of China's NTBs at anywhere from 17% to 56% on top of base trade costs for things like machinery or farm goods, depending on the product and timing. For comparison, tariffs might add a predictable 10-25%, but NTBs are a wild card-harder to plan for and often more expensive because they waste time and disrupt supply chains.

China's NTBs also play favorites. State-owned importers often skate by while private firms, especially foreign ones, get tangled in red tape. This isn't just inefficiency-it's strategy. During the trade war, China's consumers took a $38 billion hit in 2019 alone from higher prices, with over 90% of that tied to NTBs, not tariffs. Why? Because NTBs don't generate revenue like tariffs do; they just choke supply and jack up costs. Export controls on rare earths-key for tech-add another layer, acting like a hidden tax on anyone needing those materials.

Compared to other big players, China's NTBs stand out for their scale and unpredictability. The EU's bans (like on hormone-treated beef) or India's customs snarls are annoying but narrower. China's approach is broader and more discretionary, often tied to industrial goals-like propping up robotics or aerospace through subsidies and rules that quietly kneecap foreign rivals. The catch? It's not always clear how bad they are until you're stuck in the mess-data's murky, and Beijing doesn't exactly advertise the playbook. Still, the consensus is they're a bigger drag on trade than tariffs, especially for anyone trying to crack China's market.