Question

d. You are an employee of a U.S. firm that produces personal computers in Thailand and then exports them to the United States and other countries for sale. The personal computers were originally produced in Thailand to take advantage of relatively low labor costs and a skilled workforce. Other possible locations considered at the time were Malaysia and Hong Kong. The U.S. government decides to impose punitive 100 percent ad valorem tariffs on imports of computers from Thailand to punish the country for administrative trade barriers that restrict U.S. exports to Thailand. How should your firm respond? What does this tell you about the use of targeted trade barriers?

Answer 1

Answer:

My firm would respond by lobbying.

Explanation:

My firm would lobby (i.e. try to influence the decision of officials) the government of Thailand and ask them to stop the administrative trade barriers. My firm would also lobby government of US to end the tariff which they import on exports to Thailand. This way my firm would continue the operations of Hong Kong and Malaysia.

This shows that targeted trade barriers are effective and can damage the economy. It can discourage the trade barriers and ensure that they are removed.