To assess overall protection levels correctly, then, one must measure the combined effect of
ad valorem tariffs and specific tariffs.
They could boost the customs valuation of these goods, inflating
ad valorem tariffs. One change would ban the use of the 'first sale for export' for valuations, where importers declare the price a foreign exporter paid to a local supplier before shipping the goods to Europe.
Ad valorem tariffs of 15.4%, 8.5% and 10.9%, respectively, will be applied to these volumes.
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.
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.
Because most duties reflect a set percentage of that price, these
ad valorem tariffs will rise according to the official customs valuation of goods.