Depending on the relationship with the country will depend on the tariff imposed. A friendly country will simply get a lower tariff than a country that is not on good terms with Kaldus. This is how most tariffs are calculated. No matter what, any item that does not meet NSC requirements will have double the tariff. This will increase the price in Kaldus, and make NSC compliant items more attractive. In example, let’s say China has 15% tariff. However, an iPhone does not meet NSC requirements since they do not support a micro-SD card slot. This will mean that the tariff on the iPhone has raised to 30% – therefore making the iPhone more expensive. On top of that, almost all non-compliant items will be considered as a luxury item for tax purposes. This could mean a $1,000 sold in china will pay 30% which increases the price of that iPhone to $1,300. Since it doesn’t comply with NSC, the sales tax is 50% which is no an extra $650 for a total of $1,950 which is nearly doubled the Chinese price. However, if a Chinese company made a compliant smartphone and sold it to Kaldus. If the price of the phone is $1,000 – then the tariff price is $1,150. Since the phone meets standards, there will likely be no sales tax which is almost half of the iPhone even though they both started off with the same price. If there was a local Kaldan company producing smartphones (such as KCI), then a $1,000 phone will be $1,000. This competes directly with the lower tariff Chinese phone which is the main goal of the tariff. As you can read – all 3 phones starts off at $1,000.