题目内容
A ad valorem tariff provides domestic producers a declining degree of protection against import-competing goods during periods of changing prices.
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With a compound duty, its "specific" portion neutralizes the cost disadvantage of domestic manufacturers that results from tariff protection granted to domestic suppliers of raw materials, and the "ad valorem" portion of the duty grants protection to the finished-goods indutry.
The nominal tariff rate signifies the total increase in domestic productive activities compared to what would occur under free-trade conditions.
When material inputs enter a country at a vary low duty while the final imported product is protected by a high duty, the result tends to be a high rate of protection for domestic producers of the final product.
According to the tariff escalation effect, industrial countries apply low tariffs to imports of finished goods and high tariffs to imports of raw materials.
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