The nominal tax rate (nominal protection rate) refers to the statutory tax rate in the customs tariff, which is generally based on the price difference between domestic and international commodities.

Nominal tariffs only consider imports, especially manufactured goods, which raise prices in the market because of levying tariffs, thereby reducing the consumption demand of imported goods and protecting the production of similar goods in China.

It does not take into account whether the imported products are used in the production of the product, whether tariffs are imposed on the imported products, and the ratio between the tax rate on the imported finished products and the inputs.