The Effective Rate of Protection Is a Weighted Average of Nominal

question 33

Essay

The effective rate of protection is a weighted average of nominal tariffs and tariffs on imported inputs. It has been noted that in most industrialized countries, the nominal tariffs on raw materials or intermediate components or products are lower than on final-stage products meant for final markets. Why would countries design their tariff structures in this manner?
Who tends to be helped, and who is harmed by this cascading tariff structure?

---

Definitions:

Obligation

A duty or commitment that an individual is bound to by law, promise, moral principles, or social norms, requiring them to act in a certain way.

Closely Intertwined

Deeply connected or linked in a way that makes separation difficult, often describing relationships or processes.

Compromise

An agreement or settlement of a dispute that is reached by each side making concessions.

Sacrifices

Forgoing of personal desires or assets for the benefit of others or for a greater purpose.