Tariff Rate Quota (TRQ)

A Tariff Rate Quota (TRQ) is a trade policy tool that allows a specified amount of a product to be imported at a lower tariff rate, while imports exceeding that amount are subject to higher tariffs. Essentially, it sets a quota limit on imports at a preferential rate to protect domestic industries, but once that limit is reached, additional imports face increased costs. This mechanism balances encouraging imports within set limits and protecting local producers from excessive foreign competition.