Nominal and the effective tariff

Posted on by Belinder

 

What’s the difference between the nominal tariff and the effective tariff? Assume 25% Tariff has been imposed on the imported Chinese TV. The U.S. TV is $150 and the Chinese TV is $100 before tariff. The cost of non-labor inputs for both U.S TV and Chinese TV is $80. What is the Effective Tariff Protection?

 

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