Developing nations often maintain that industrial countries permit raw materials to be imported at very low tariff rates while maintaining high tariff rates on manufactured imports.Which of the following refers to the above statement?
A) Tariff-quota effect
B) Nominal tariff effect
C) Tariff escalation effect
D) Protective tariff effect

Question

Quizplus · Accepted Answer

The statement refers to the Tariff escalation effect, which is when industrial countries maintain higher tariff rates on processed and manufactured goods, while keeping lower tariffs on raw materials and agricultural products. This leads to developing countries facing higher barriers to trade when trying to export finished products, which can hinder their economic growth.

Developing Nations Often Maintain That Industrial Countries Permit Raw Materials