Germany wants to retaliate against India for trade restrictions that limited the number of German cars that could be brought into India. Which of the following policy decisions would Germany utilize to accomplish this goal?
A) increasing import quota on cars from India
B) enacting export embargo on cars to India
C) adjusting import tariffs on cars from India from 20% to 5%
D) adjusting import tariffs on cars from India from 5% to 20%

Question

Quizplus · Accepted Answer

Germany would adjust import tariffs on cars from India from 5% to 20% to retaliate against India's trade restrictions. This would make it more expensive for Indian car manufacturers to sell cars in Germany and potentially decrease demand for Indian cars, thereby impacting India's economy. Option A would not accomplish Germany's goal as it would allow more cars from India to enter the German market. Option B would be too extreme and may not be a feasible option for Germany. Option C would not be a retaliatory measure and would not necessarily impact India's economy.

Germany Wants to Retaliate Against India for Trade Restrictions That