It’s Not (Just) the Tariffs : Rethinking Non-Tariff Measures in a Fragmented Global Economy

Tariff protection has declined substantially over recent decades, even though tariffs increased in some countries in 2025. Trade restrictions have not disappeared; they have changed form. Non-tariff measures (NTMs) have become central instruments of trade policy, particularly in high-income countries and in highly regulated sectors. Many NTMs pursue legitimate objectives such as food safety, environmental protection, and consumer protection. Yet they also shape market access in less visible ways. Because compliance costs vary widely, NTMs can act as capability-based filters that sort exporters according to regulatory capacity, technological sophistication, and export structure. Drawing on recent advances in estimating ad valorem equivalents (AVEs), this paper examines how the growing importance of NTMs relative to tariffs alters effective protection. Three patterns emerge. Higher-income countries rely relatively more on NTMs than on tariffs; exporters from low- and middle-income countries face higher effective protection in advanced markets; and NTMs disproportionately burden smaller firms, increasing the likelihood of export exit and potentially contributing to greater market concentration. Together, these mutually reinforcing patterns highlight the importance of transparency, careful policy design, and regulatory cooperation to ensure NTMs achieve legitimate objectives without reinforcing fragmentation or inequality in global trade.