With a compound tariff, a domestic importer of an automobile might be required to pay a duty of $200 plus 4 percent of the value of the automobile.

Question

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A compound tariff combines both a specific tariff (a fixed fee, in this case, $200) and an ad valorem tariff (a percentage of the item's value, in this case, 4 percent), requiring the importer to pay both charges.

With a Compound Tariff, a Domestic Importer of an Automobile