Limits to trade quantities are making a comeback

Rising geopolitical tensions, pandemic-era shortages, and anti-globalization sentiments have fueled a global comeback of trade measures limiting the quantities of goods that can be imported and exported. Between 1950 and 2000, policymakers in the US and elsewhere phased out most of these so-called quantitative restrictions, or QRs—such as import and export bans, licensing requirements, and tariff rate quotas—for good reasons. But QRs have resurged since the Great Financial Crisis (2008–10) in a wave that appears unlikely to recede any time soon.

US presidents Joseph R. Biden Jr. and Donald Trump both contributed to the wave, often by imposing new export controls on high-tech products. As well, Trump recently imposed a tariff rate quota (TRQ) on British auto exports, applying a 10 percent tariff on the first 100,000 British autos imported into the US annually and a 25 percent tariff on any more each year.

Architects of the General Agreement on Tariffs and Trade, launched in 1947, and its successor the World Trade Organization, launched in 1995, had strong reasons for seeking to abolish QRs. The measures foster corruption because some firms are favored by valuable permits or quota rights, while other firms are frozen out. QRs introduce rigidity into quantities that may be imported or exported, creating abrupt shifts in market-clearing prices, depending on whether import demand, or export supply, is above or below the QR threshold. Finally, the tariff-equivalent level of import QRs, or the tax-equivalent level of export QRs, may be ridiculously high. At their essence, QRs replace efficient price systems with bureaucratic controls and ration tickets.

Wide Variety of QRs

QRs come in many flavors, documented by the Global Trade Alert. Some, like export or import bans, are quite rigid. Others, like licensing requirements, can be either rigid or flexible. Table 1 reports the global frequency of new QRs, starting in 2017. Since 2020, when the COVID-19 pandemic erupted, export bans and export licensing requirements are most frequently imposed, followed by import licensing requirements and tariff rate quotas (TRQs).

As shown in table 2, US export licensing requirements, widely imposed by the Biden administration, are the dominant US type of QR. Most of those announced in 2023 and 2024 represent sanctions against Russia and China.

Active QR Users

The US and China stand out as the most active QR users, as shown in table 3, followed by Brazil, Argentina, and the EU. Over half (110) of US QRs are export licensing requirements, while around half of China's QRs are divided between import licensing requirements (45) and export licensing requirements (55). TRQs are favored by Brazil (145) and Argentina (108), while the EU emphasizes export and import bans and TRQs.

Targeted Sectors

QRs mostly target high-end equipment, both globally and in the US. The Common High Priority Items List enumerates products identified by the US, the EU, Japan, and the UK that Russia procured in 2022 for its weapons programs when it invaded Ukraine. This list covers many high-end equipment and defense products. Even before 2022, QRs were already enforced by several countries on items in the Common High Priority Item List (table 4).

Quantitative Importance

To very roughly assess the quantitative impact of QRs, we focus on the most common forms: export bans, export licensing requirements, import bans, and import TRQs. This choice minimizes double counting, because other QR forms sometimes overlap with the selected categories.

We assume that once announced, new QRs since 2017 remain in effect through 2025. As shown in figure 1, with this assumption, the cumulative trade value impacted by the selected QRs since 2017 surpassed $8 trillion as of May 2025. Significantly higher trade values are calculated for export QRs than for import QRs. This contrasts with the period before the Uruguay Round Multilateral Trade Agreement (1995) when import quotas were the dominant form. As well, the Global Trade Alert does not report tariff line items for about 30 percent of QRs, and imports may represent a greater share of unreported line items. In any event, because of unreported line items, the $8 trillion figure probably understates actual QR coverage in 2025.¹

Conclusions

Rising geopolitical tensions probably ensure a long life for export QRs. In addition, based on past experience, President Trump may negotiate import TRQs to replace some of his high tariffs. The example of US and Chinese QRs may inspire wider use by other countries. For now, a return to trade relatively free of QRs seems a distant prospect.

Note

The amount of trade affected is recorded by each New Industrial Policy Observatory (NIPO) entry, and the base year of the trade data is 2019 (see methodology). It is possible that the line items have been affected by multiple trade actions and therefore face double counting. Therefore, the figure here is an estimation based on the Global Trade Alert NIPO database only counting categories that should not be contaminated by double counting.