Question

A number of experts warn of adverse consequences of a Donald Trump presidency on certain types of foreign companies. Specifically, they are concerned about a 35% tariff imposed on automobile exports into the United States. Describe how the following companies can deal with this kind of risk.

a.General Motors, a US company with operations in Mexico.

b.Toyota Motors, the Japanese automobile MNC with manufacturing plants in many countries such as US Mexico, and Japan.

Answer 1

Tariff means a tax or duty to be paid on a particular class of imports or exports. Tariff is meant by Trump in order to protect the domestic counterparts.

a. General motors(GM) are the car makers of US who works in Mexico as well as Canada. The GM says that when the tariffs are being increased, this leads to 'a smaller GM' with fewer jobs while isolating US businesses from the global market and less investment. Some aides sys that Trump is pursuing the national security probe to put pressure on Canada and Mexico to agree or negotiate the NAFTA. And it is closing down mostly it says.

b. Toyota Motors respond to the tariff as that they would threaten the US manufacturing , jobs, exports, and economic prosperity.And they also told that the international car makers assembling vehicles in United States are based in Japan, German and South Korea, that are America's closest allies. So beware.

Anyways the China has retaliated with tariff on food products and many such. By now US has delayed the tariff plan a bbit. NOt executed.