Minimizing Trade Barriers
National Appliance Corporation (NAC) needs to build a new manufacturing facility to meet the increasing demand for professional-grade appliances. NAC managers are considering building the facility in Mexico but are hesitant because of the high tariffs involved. Another possible location for the facility is India; however, the country also imposes high tariffs. Wherever NAC builds a plant, parts will need to be imported from other nations.
-Which of the following would most likely ensure that NAC paid the lowest tariff possible on the appliances it exports around the world?

Question

Minimizing Trade Barriers 
National Appliance Corporation (NAC) needs to build a new manufacturing facility to meet the increasing demand for professional-grade appliances. NAC managers are considering building the facility in Mexico but are hesitant because of the high tariffs involved. Another possible location for the facility is India; however, the country also imposes high tariffs. Wherever NAC builds a plant, parts will need to be imported from other nations.
-Which of the following would most likely ensure that NAC paid the lowest tariff possible on the appliances it exports around the world?

Quizplus · Accepted Answer

Accurate product classification can ensure that goods are taxed at the correct, and potentially lower, tariff rate. This is because tariffs can vary significantly based on the category under which a product is classified.