Import Tariffs

Assignment 1: Research Paper—Import Tariffs

Governments vary tariffs based on the political and economic needs of the country. Import of capital goods that help industrialization and economic development may be eased with low tariffs while that of consumption goods may be discouraged with high tariffs. For instance, importing toys in Brazil has a tariff of 100%, while construction and agricultural equipment may carry low or no import duty. Companies are well advised to understand the host country’s tariffs.

Select an MNC that imports goods into a specific country. You may select one of the MNCs from the list given for the course project. Ensure that the MNC you select for this assignment is not repeated in the course project. Here is the list: CEMEX, Fiat, Nestle, Grupo Gigante, Komatsu, Shell, IKEA, Toyota, Wal-Mart, Coca-Cola, McDonald’s, Honda, and Philips Electronics.

Visit the World Trade Organization Web site and obtain the most recent trade and tariff profile by country. You may refer to the following:

• World Trade Organization (WTO). (n.d.). World tariff profiles 2008. Retrieved February 24, 2009, fromhttp://www.wto.org/english/res_e/booksp_e/tariff_profiles08_e.pdf

Review the tariffs your selected MNC pays to import goods into that country. Then, review the tariffs that the U.S. assesses for similar products from that country and answer the following questions:

1. Based on your review of the specific tariff and other tariffs found in the tariff profile, do you think the tariff for the import is average, better, or excessive versus other products? Why?
2. How do you think these tariffs will change given the current economic conditions? Give reasons for your estimate.
3. What effect will the change have on your selected company?
4. What can MNCs do if they feel a country’s tariffs are unfair?

Prepare a 3- to 4-page paper in Microsoft Word format. Apply current APA standards for writing to your work. Use the following file naming convention: LastnameFirstInitial_M2_A1.doc.

By Wed, May 15, 2013, submit your assignment to the M2: Assignment 1 Dropbox.