Reference no: EM133266828

Assignment:

Government Intervention in Trade Homework

Consider the different government instruments of trade policy discussed of our textbook. Think about how companies wishing to do business abroad are affected by these protections in terms of the firm's business policies, operations, overarching strategy, decision-making, supply chain (etc.). Look beyond the obvious definitions to consider how these government policies fundamentally can affect the firm. For example, if you were a U.S. firm doing business in Brazil and Brazil had tariffs on your product, how would tariffs affect you? Do not say "you pay a tax on imports into Brazil" - this is by definition. What does paying this tax mean for the firm in terms of its policies, operations, decision-making, strategy, and the like?

Select three different types of government involvement in trade. Choose from tariffs, subsidies, import quotas, tariff rate quotas, voluntary export restraints, export bans, local content requirements, administrative policies, anti-dumping policies, and embargoes. For each type, give one example of how this particular instrument of trade policy impacts a firm engaging in or wishing to engage in international business in that country. Please explain your rationale.

Remember that you are taking the perspective of a firm going international to a country that has protections (you are NOT a U.S. firm getting, for example, subsidies in the U.S. and then going abroad; instead, you are a firm that is going abroad to a country that has, for example, subsidies for its local companies). You do not need to research "actual" examples of protections in certain countries - just develop examples of how firms are impacted based on your understanding of the policy and firm activities and concerns.

Please spend time considering firm implications for this assignment - a superficial discussion is not sufficient. If you simply restate definitions, discuss country or consumer implications (rather than implications for the firm doing business abroad that is facing these types of interventions), or state the obvious initial issue for the firm (e.g. "a tariff is a tax on imports, so the firm must pay more, which increases costs") you will receive zero credit for this assignment. Instead, you should consider at least two steps beyond the obvious for implications (e.g. "because the tariff is a tax on imports, firms going to that country have increased costs, which means the firm may have to do x, which could lead to y for the firm" where x and y might relate to decisions that influence operations).

With regard to format and length, it is fine to have a numbered list including the policy and its proposed effect on the firm, as well as a brief explanation of the rationale for how each type of policy impacts the firm. If you would prefer essay format, that is okay as well, but not necessary.