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.
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.
Apart from open criticism, the EU promptly announced safeguard measures itself (ad valorem tariffs between 15% and 26%, valid at first for 200 days) to prevent cheap steel from being diverted from its original American destination and dumped onto European markets, causing serious price distortions and, therefore, threatening the industry as a whole.
Because most duties reflect a set percentage of that price, these ad valorem tariffs
will rise according to the official customs valuation of goods.