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TCO - AD/CV Duties -312 Forum 2 - Assignment Example

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Many traders and consumers go about life on high standards of living without realizing the primary causation (Henderson & Hooper, 2006). Some become accustomed to…
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TCO - AD/CV Duties -312 Forum 2
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TCO - AD/CV Duties -312 Forum 2

Download file to see previous pages... Such governments use tools like taxation, subsidies, custom duties, sanctions and other trade restriction strategies like strict documentation to affect foreign trade that in a way affects their citizens as well.
Toyota Company is the No 1 automobile company in the world. The Japanese company trades its product across the globe with incredible competitive advantage. The company has segregated its market in a manner that its products sell at higher prices in developed countries as compared to the prices set for its products in the developing countries. In a bid to promote sales and attain greater profit margins by marginal advantage, the Japanese government has subsidized the Toyota products; which makes it cheaper for foreign consumers – no wonder the company’s market superiority (Encarnation, 1994). In the US however, the Federal Government has laid down countermeasures to ensure that her manufacturers are protected from this force (Encarnation, 1994).
The Federal Government issues Anti-Dumping (AD) duties; against cheap products dumped into the US market and Countervailing (CV) duties; against foreign subsidies, to regulate Toyota motors’ trade traffic into her market. Consequently, the Total Cost of Ownership (TCO) of the products has become high in the US market, protecting the US automobile manufacturers from excessive competition and price wars derived from Toyota Motors foreign trade strategies (Sato & Nelson, ...Download file to see next pagesRead More
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