A firm may set up production activities in a foreign country,where trade barriers do not currently exist,to reduce the threat of trade barriers being imposed later.

Question

Quizplus · Accepted Answer

This statement is true. Setting up production activities in a foreign country where trade barriers do not exist can reduce the threat of trade barriers being imposed later because the firm will already have a local presence and may be able to negotiate with the government to avoid or minimize any potential trade barriers. Additionally, the firm may be able to establish relationships with local suppliers and customers, which could help mitigate the impact of any future trade barriers.

A Firm May Set Up Production Activities in a Foreign