Assume that the United States imports televisions from Taiwan at a price of $300 per unit and that these televisions are subject to an import tariff of 25 percent.Also assume that U.S.components are used in the televisions assembled by Taiwan and that these components have a value of $100.Under the Offshore Assembly Provision of U.S.tariff policy, the price of an imported television to the U.S.consumer after the tariff has been levied is $375

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The Offshore Assembly Provision allows for the exclusion of the value of U.S. components from the tariff calculation. The tariff is applied only to the value added abroad, which is $200 ($300 - $100). The tariff is 25% of $200, which is $50. Therefore, the price after the tariff is $350 ($300 + $50).

Assume That the United States Imports Televisions from Taiwan at a Price