Ad Valorem Tariff

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Ad Valorem Tariff

A tax on an import calculated as a percentage of the value of the import. This contrasts with tariffs on the weight, size, or quantity of the import. Like all tariffs, ad valorem tariffs are controversial, with opponents arguing that they are economically inefficient. See also: Ad Valorem Tax.
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They could boost the customs valuation of these goods, inflating ad valorem tariffs.
Congress had put in place an American Selling Price (ASP) tariff system in 1909, replacing ad valorem tariffs based on invoice prices by tariffs based on what the imported commodity would cost to produce in America.
The negative impact of specific tariffs (more common since the Uruguay Round ended) offset the benefits of lower ad valorem tariffs.
While ad valorem tariffs are transparent (say, 20% of import value), specific tariffs are not.
To assess overall protection levels correctly, then, one must measure the combined effect of ad valorem tariffs and specific tariffs.
The calculations are based on ad valorem tariffs and specific tariffs (translated into ad valorem equivalents).
With his decision to impose a maximum of 30% ad valorem tariffs as opposed to the 40% requested by the steel lobby, the President split the difference between free trade and total protectionism.
BMI cautions, however, that Iran imposes ad valorem tariffs of over 60% on imported medicines, which will significantly raise the final cost to consumers.
Because most duties reflect a set percentage of that price, these ad valorem tariffs will rise according to the official customs valuation of goods.