Two types of tariffs: Ad Valorem or Specific

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In the last post we listed the eight largest trade partners for the U.S.
and briefly described how the elimination of the de minimis rule had a significant effect on the goods trade of one of those eight trade partners, namely China. Now we turn our attention to two types of tariffs, prevalent since this country’s beginnings.

Tariffs can be ad valorem or specific. Ad valorem tariffs are the most widely used today (in terms of the number of instances of such in the Harmonized Tariff Schedule of the United States) and are calculated according to the value of each good based on a percentage. Specific tariffs are fixed based on weight, volume, or number of items of the good. These two duty value specifications are different, and much of the harm either wrought or perceived by the Smoot-Hawley tariff is due to their difference. One is based on a percentage of value (ad valorem) and the other is based on units of weight (specific). Let’s take a closer look at how ad valorem tariffs are being used in relation to each of the eight trade partners.

At the end of the Northern Hemisphere’s summer in 2025, European Commission President Ursula von der Leyen and United States President Donald Trump shook hands in a show of agreement for 15% taxation on most EU exports to the US. This baseline tariff would apply to several of Europe’s crucial sectors including automobiles, pharmaceuticals, and semiconductors. Polysyllabic imports – indeed; and perhaps, of more trade import than import of speech. This deal surpassed the 10% tariffs imposed by the American president in April of 2025. Yet, 15% is still lower than the US president’s threat of 30% tariffs. As part of this trade agreement the EU promised to buy $750B of American energy products over three years and invest $600B in the US. In this way, Trump established a dominant position in many of the succeeding trade negotiations, one-sided, bilateral, or otherwise.

Perhaps surprisingly, the second largest trade partner of the US is Mexico. In March of 2025, 25% tariffs were set as a baseline for Mexican imports, with the generous exclusion of products that fall under a 2020 trade agreement known as USMCA. The United States Mexico Canada Agreement has been important to trade in North America since its inception: And in some form they will be in the future. There is much to be said, and will be, about trade relations between democratic North American countries with porous borders.

Canada – Oh Canada! In October of this year, our great neighbor to the North had a 35% baseline tariff set on it with a threat of 45% looming. Tariffs in March were at 25% with exclusions under USMC. Political influence and negotiation are very much in play these days between Canada and us.

In the Olympics, gold medals are given for first place, silver for second place, and bronze for third. If China has its way, then maybe their fourth place finish in US trade partnerships will be forged and forwarded with the use of rare earth elements. China holds a special place in US trade negotiations; even if it were only for its mining, refining, and utilization capabilities of the elements just mentioned. But it is not just that. China has become more than a formidable opponent in tariff negotiations. Its economic threats to the US are more than matched by its military capabilities. In 2012 Xi Jinping became General Secretary of the Chinese Communist Party. He became President of The People’s Republic of China in 2013: The Belt and Road Initiative was launched by Xi Jinping at the Two Sessions Meetings that same year. Tariffs as high as 145% had been threatened – then rescinded – by Trump in negotiations since his re-election. Xi then brought rare earth elements into play during the negotiations. Trump backed down though claimed some victory in tariff reductions from 20% to 10% due to mostly unspecified concessions over the deadly and often-abused drug fentanyl. When it comes to tariffs, Trump seems to have met a challenger to his dominant tariff position in the form of a Chinese leader named Xi.

Japan also maintains a special place in the US trade partner relationship hierarchy. Economically speaking, Japan surrendered its position in relation to China four or more decades ago. Threatened with 25% tariffs during negotiations in July, the baseline settled at 15% for most goods including cars and auto parts. Concessions to the tune of $550B were also mentioned.

South Korea duties were set at 10% in April. This was then upped to 15% after an accord much like the EU and Japan did. Concessions for $200B in cash “installments” and $150B in shipbuilding “cooperation” were given according to an article in the Wall Street Journal that was updated on Oct. 30, 2025.

Taiwan holds a dominant position in the semiconductor manufacturing sector, which is huge! It also is just some 80 miles across the Taiwan Strait from one of its neighbors which is a very initiative-taking militarily motivated presence also known as China.

At the end of our list of eight US trade partners is Vietnam, and it is highly significant despite its position in the list. Vietnam faces a 20% tariff: up from 10% in April, and below the 46% threatened. More significant than the baseline adjustments and negotiating threats is the importance of transshipments of goods that often pass through Vietnam – especially from China. Those shipments may have a higher 40% tariff applied.

What do you think about tariffs imposed on imports from trade partners? What then should we do for consumers in tariff terms? Should we raise them or lower them? Let us know at INFO@MICRONCORP.COM. After that, we will see you next time on TAXING TARIFFS.