Would this be an example? Say that Ford's cost in making a car is 15K and they sell it for 20K. But they want to sell it to a country that can only afford $10K. So they get an IC for 10K, which they sell to Walmart, which needs it to import products that cost them 10K less than American-made products.
Sage of Main Street, all federal assessments of goods’ values are of their values within USA domestic markets or ports, expressed in U.S. dollars. The only reason that production costs should be considered would be in cases of goods custom made for a specific purchaser and would be of much lesser value to most other potential customers for such goods.
Ford will not charge lesser prices to exporters while their USA dealers would continue to pay higher prices. The consequences of doing so would be for the “exporters” to somehow divert the cars to USA’s domestic markets and have an unjustified advantage over Ford’s domestic dealers.
[Let us suppose this year the federal fee rate charged to exporters who are ENTITLED TO REQUEST to pay the U.S. federal fee in order to acquire transferable Import Certificates is 3.63%. (Last year those fees were 3.05% but due to some inflation of the U.S. dollar and increased direct federal expenses due to increases of federal direct net expenditures due to this trade policy.]
The federal assessment of the exporter’s shipment of Fords was $1,500,000. The exporter paid (0.0363)($1.5 million) = $54,450 to the federal government. (this is not net federal revenue. It only defrayed government’s direct expenses due to the Import Certificate policy.
When the shipment of Fords has departed from the USA, the exporter receives a transferable Import Certificate with a face value of $1.5 million.
Now let us suppose the global market value of Import Certificates is 11.00% after we deduct a small brokerage rate for selling the certificate over the internet. The exporter has just realized a profit due to certificate transactions
of (0.11 – 0.0363)($1.5 million) = $110,550.
Thus the exporter has reduced his net costs by 7.37%. He’d like to pocket that money but between the competitive market pressures due to competing exporters of Fords and foreign buyers getting price quotes from all competing exporters or actually acting as exporters of Fords from the USA, this policy behaves as a subsidy of its nation’s exported goods.
Respectfully, Supposn