The most common is an ad valorem tariff, which means that the customs duty is calculated as a percentage of the value of the product. ... Mixed tariffs are expressed as either a specific or an ad valorem rate, depending on which generates the most (or sometimes least) revenue.

What is an example of ad valorem tariff?

Ad Valorem Tariffs

An example of an ad valorem tariff would be a 15% tariff levied by Japan on U.S. automobiles. The 15% is a price increase on the value of the automobile, so a $10,000 vehicle now costs $11,500 to Japanese consumers.

What is the difference between ad valorem and specific tariff?

There are two types of tariffs: A specific tariff is levied as a fixed fee based on the type of item, such as a $1,000 tariff on a car. An ad-valorem tariff is levied based on the item's value, such as 10% of the value of the vehicle.