TRQ (Tariff Rate Quota)

A Tariff Rate Quota (TRQ) is a trade policy tool that allows a certain quantity of a specific product to be imported at a lower tariff rate, while any amount above that quota is subject to a higher tariff. Essentially, it combines two approaches: it encourages imports up to a certain limit at a reduced tax, making it more affordable, and it discourages over-importation by imposing a higher tax on any excess. TRQs are often used in agriculture to protect domestic farmers while still allowing some foreign competition.