The effects of trade liberalization on the final product are analyzed when the importing (domestic) country possesses an intermediate goods market. It is assumed the intermediate goods provided by the domestic upstream firm are indispensible for producing the domestic final goods. This paper finds that even though the foreign final-product firm has not yet started exporting goods to the domestic market, the domestic input price may slump quickly because of the tariff reduction. Consequently, the output and profit of the domestic final-product firm will increase due to trade liberalization. This finding contradicts what is commonly believed. In addition, if the home country has an exogenous market structure for intermediate goods, the optimal tariff for the domestic country would be lower than that without an intermediate goods market. However, if the domestic intermediate goods market structure is endogenous, then the domestic government should raise the tariff within a certain range to protect the domestic industry. Yet, if the domestic intermediate good firm has a very high fixed costs, then the domestic government should do the reverse by reducing the tariff to a level that is lower than when the intermediate goods market structure is exogenous and let the foreign firm monopolize the market.