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Tariff escalation is observed when tariffs on raw materials are lower than tariffs on semi manufactures, which, in turn are lower than tariffs on finished products. Tariffs escalate with the stage of processing. In theory, a reduction of the tariff escalation entails a reduction of the effective protection.
See also STAGE OF PROCESSING
Related terms:
TARIFF ANOMALY - Used by some to refer to what is commonly known as tariff escalation, i.e. the tariff rate on raw materials or semi-finished products is lower than on the finished product made of these materials in order to encourage domestic manufacturing. For others, a tariff anomaly is precisely the opposite, i.e. the tariff rate on raw materials and semi-finished products is higher then the rate levied on the finished product.
Source: Walter Goode: Dictionary of Trade Policy Terms, Fourth Edition, (Cambridge University Press/WTO, 2003), p.337