Originally Posted by
Oldsledz
How is the cost of the tariff determined ? Is it based on the retail value of the item, or what it cost to make it ?
Originally Posted by
tomato coupe
It's based on the value listed on the commercial invoice, which should be the selling price for new items.
To clarify, an ad valorem tariff is typically a percentage of the price paid for the good by the importer -- i.e., it is
not a % of the retail price. This is an important distinction because some goods (e.g., groceries, autos) have relatively small markups and hence the tariffs are a larger share of the retail price, while other goods (e.g., many luxury goods) have much higher markups, and thus the tariff is a smaller share of the retail price -- all other things equal, of course.