In Russia,Johnson & Johnson's 2-in-1 Shower Gel is considered to be a cosmetic (20 percent tariff).J&J would like it to be considered as a soap substitute (15 percent tariff).This points out which of the following strategies that companies generally prefer in foreign markets with respect to tariffs?

Question

Quizplus · Accepted Answer

Companies generally prefer to ask for reclassification of the product to a lower customs classification in foreign markets with respect to tariffs to reduce their costs and increase profitability. This strategy involves seeking a lower classification for a product to reduce the tariff burden. In the given scenario, Johnson & Johnson is trying to reduce the tariff rate by asking for the 2-in-1 Shower Gel to be reclassified as a soap substitute, which incurs a lower tariff of 15 percent instead of 20 percent.

In Russia,Johnson & Johnson's 2-In-1 Shower Gel Is Considered to Be