Overestimate protection for chinese company

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China exports China produced mobile phones such as Xiaomi and imports mobile phones including Samsung Galaxy with an ad valorem tariff of 9 percent. Dram is an essential and substantial part of electronic goods including mobile phones such as Xiaomi. Korea exports Dram to the world and its market share in the world is more than 70 percent. The price of Dram usually differs between an export country (i.e. Korea) and an import country (i.e. China) because of tariffs, which is typically 7 percent, levied by the importing country. Do you believe the tariff of 9% on the final product of mobile phone overestimate protection for Chinese company producing Xiaomi phone? Explain your answer.

Reference no: EM132948453

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