Which components are included in a compound tariff?

Which components are included in a compound tariff?

• A. A tax on exports.
• B. A fixed per-unit charge.
• C. A value-based ad valorem tariff only.
• D. A specific per-unit charge plus a value-based ad valorem tariff.

Answer: (D)

A compound tariff blends a specific per-unit charge with an ad valorem charge. The per-unit part (specific duty) adds a fixed amount for each unit imported, while the ad valorem part applies a percentage of the goods’ value. Together, they create a total tariff that depends on both quantity and price. The other options don’t fit because a tax on exports isn’t a typical tariff component for imports, a fixed per-unit charge alone is just a specific tariff, and a value-based tariff alone is only ad valorem. The combination of both components describes a compound tariff. For example, a duty of $2 per unit plus 5% of value would levy $2 for every unit plus 5% of the shipment’s value.

A compound tariff blends a specific per-unit charge with an ad valorem charge. The per-unit part (specific duty) adds a fixed amount for each unit imported, while the ad valorem part applies a percentage of the goods’ value. Together, they create a total tariff that depends on both quantity and price. The other options don’t fit because a tax on exports isn’t a typical tariff component for imports, a fixed per-unit charge alone is just a specific tariff, and a value-based tariff alone is only ad valorem. The combination of both components describes a compound tariff. For example, a duty of $2 per unit plus 5% of value would levy $2 for every unit plus 5% of the shipment’s value.