This paper surveys the measurement of trade costs, including what is known and what remains to be discovered. Trade costs are large, especially in rich countries, with an ad valorem tax equivalent of about 170%. Poor countries face even higher trade costs. Trade costs vary significantly across countries and goods, and have economic significance. Theory plays a key role in interpreting trade costs and improving future research. New results are presented to apply and interpret gravity theory and handle aggregation appropriately. Trade costs include all costs incurred in getting a good to a final user, excluding the marginal cost of production. These include transportation costs, policy barriers, information costs, contract enforcement costs, currency costs, legal and regulatory costs, and local distribution costs. Trade costs are reported in terms of their ad valorem tax equivalent. The 170% headline number breaks down into 55% local distribution costs and 74% international trade costs. Trade costs are measured from three sources: direct measures of trade costs, inference from trade volumes, and inference from prices. Theory is essential for inferring trade costs that cannot be directly measured. The gravity model links trade barriers to trade flows and is often used to infer trade costs. Trade separability allows for the analysis of trade across countries separately from production and consumption within countries. Trade costs are large and variable across goods and countries. For example, the production cost of a Barbie doll is $1, while it sells for about $10 in the United States, with an ad valorem tax equivalent of 900% for transportation, marketing, wholesaling, and retailing. For industrialized countries, the average ad valorem tax equivalent of trade costs is 170%, with 21% transportation costs, 44% border-related trade barriers, and 55% retail and wholesale distribution costs. Policy barriers, including tariffs and non-tariff barriers, are also significant. For industrialized countries, the average policy barrier is about 8%, with a breakdown of 8% policy barrier, 7% language barrier, 14% currency barrier, 6% information cost barrier, and 3% security barrier. Trade barriers in developing countries are higher than those in industrialized countries. High value-to-weight goods are less penalized by transport costs. The value of timeliness varies across goods, explaining modal choice. Poor institutions and poor infrastructure penalize trade, differentially across countries. Sectoral trade barriers appear to vary inversely with elasticities of demand. Policy barriers, especially non-tariff barriers, also vary significantly across goods. Non-tariff barriers are highly concentrated, with many sectors having close to zero non-tariff barriers, but U.S. textiles and apparel have 71% of products covered, with tariff equivalents ranging from 5% to 33%. Direct evidence on trade costs comes in two major categories: policy barriers (tariffs, quotas) andThis paper surveys the measurement of trade costs, including what is known and what remains to be discovered. Trade costs are large, especially in rich countries, with an ad valorem tax equivalent of about 170%. Poor countries face even higher trade costs. Trade costs vary significantly across countries and goods, and have economic significance. Theory plays a key role in interpreting trade costs and improving future research. New results are presented to apply and interpret gravity theory and handle aggregation appropriately. Trade costs include all costs incurred in getting a good to a final user, excluding the marginal cost of production. These include transportation costs, policy barriers, information costs, contract enforcement costs, currency costs, legal and regulatory costs, and local distribution costs. Trade costs are reported in terms of their ad valorem tax equivalent. The 170% headline number breaks down into 55% local distribution costs and 74% international trade costs. Trade costs are measured from three sources: direct measures of trade costs, inference from trade volumes, and inference from prices. Theory is essential for inferring trade costs that cannot be directly measured. The gravity model links trade barriers to trade flows and is often used to infer trade costs. Trade separability allows for the analysis of trade across countries separately from production and consumption within countries. Trade costs are large and variable across goods and countries. For example, the production cost of a Barbie doll is $1, while it sells for about $10 in the United States, with an ad valorem tax equivalent of 900% for transportation, marketing, wholesaling, and retailing. For industrialized countries, the average ad valorem tax equivalent of trade costs is 170%, with 21% transportation costs, 44% border-related trade barriers, and 55% retail and wholesale distribution costs. Policy barriers, including tariffs and non-tariff barriers, are also significant. For industrialized countries, the average policy barrier is about 8%, with a breakdown of 8% policy barrier, 7% language barrier, 14% currency barrier, 6% information cost barrier, and 3% security barrier. Trade barriers in developing countries are higher than those in industrialized countries. High value-to-weight goods are less penalized by transport costs. The value of timeliness varies across goods, explaining modal choice. Poor institutions and poor infrastructure penalize trade, differentially across countries. Sectoral trade barriers appear to vary inversely with elasticities of demand. Policy barriers, especially non-tariff barriers, also vary significantly across goods. Non-tariff barriers are highly concentrated, with many sectors having close to zero non-tariff barriers, but U.S. textiles and apparel have 71% of products covered, with tariff equivalents ranging from 5% to 33%. Direct evidence on trade costs comes in two major categories: policy barriers (tariffs, quotas) and