You are an employee of an U.S. firm that produces personalcomputers in Thailand and then exports them to the U.S. and othercountries for sale. The personal computers were originally producedin Thailand to take advantage of relatively low labor costs and askilled workforce. Other possible locations considered at that timewere Malaysia and Hong Kong. The US government decides to imposepunitive 100% ad valorem tariffs on imports of computers fromThailand to punish the country for administrative trade barriersthat restrict U.S. exports to Thailand. How do you think your firmshould respond? What does this tell you about the use of targetedtrade barriers?
