Suppose the Government of Taiwan Subsidized Its Watch-Making Industry, Enabling

Suppose the government of Taiwan subsidized its watch-making industry, enabling Taiwanese producers to undersell foreign watch producers. The law of comparative advantage indicates that watch-importing nations would best take advantage of the Taiwanese subsidization policy by:

A) setting a tariff high enough to just offset the subsidy granted to the Taiwanese watch-making industry.
B) setting a declining quota on the import of Taiwanese watches such that the nation's domestic watch-making industry would continue to grow at the same rate as the rest of the economy.
C) setting a tariff such that the prices of Taiwanese and domestic watches to the consumer are equal.
D) accepting the subsidy of the Taiwanese government, making the appropriate adjustment for the resources temporarily displaced from the domestic watch-making industry.