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Chapter 5 Case Study

The document discusses the growth of apple juice concentrate exports from China to the US. It explains that China developed a competitive advantage in apple juice production due to foreign investment and government support of the industry. This allowed China to gain a significant share of the global market in a short time and forced the US to import Chinese apple juice. The US then imposed anti-dumping tariffs on Chinese apple juice imports due to material damage caused to US producers by low Chinese prices. The passage also argues that this type of international trade can benefit both home and host societies by providing high quality goods at lower prices and supporting economic development and employment.

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Jhoanne Marie Tedera
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16 views

Chapter 5 Case Study

The document discusses the growth of apple juice concentrate exports from China to the US. It explains that China developed a competitive advantage in apple juice production due to foreign investment and government support of the industry. This allowed China to gain a significant share of the global market in a short time and forced the US to import Chinese apple juice. The US then imposed anti-dumping tariffs on Chinese apple juice imports due to material damage caused to US producers by low Chinese prices. The passage also argues that this type of international trade can benefit both home and host societies by providing high quality goods at lower prices and supporting economic development and employment.

Uploaded by

Jhoanne Marie Tedera
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter 5 Trading Internationally

Kindly read Chapter 5 and answer the following questions about the US
anti-dumping against Chinese apple juice concentrate producers, closing case
on page 146-147 of your e-reference.

1. Considering absolute and comparative advantages , how would you


explain the growth in AJC exports from China to the USA?

The United States was one of the world's largest apple juice consumers in
2009. In the United States, the apple juice business consolidated, with
fewer factories making apple juice. On the other contrary, the apple juice
business in China has undergone significant expansion as a consequence
of foreign direct investment and government assistance, resulting in a
geographic change in the apple juice industry's dominance. The apple
juice business demonstrates the relationship that has contributed to
China's emergence as an agricultural exporter: small-scale farmers, food
industry investors, and government officials. The emergence of the apple
juice business shows the mobilization of investment from a combination of
private enterprises, local and central government, and international
investors to use agricultural raw resources to establish an industry and gain
a significant portion of the worldwide market in a very short time. As a
result of purposeful support and financial flows, the apple juice business in
China has seen tremendous development, resulting in a spatial shift in the
apple juice company's expertise. Both have an absolute advantage in
apple juice, but due to their opportunity costs, China can manufacture
more apple juice, forcing the Us to be a major importer of Chinese apple
juice and levy anti-dumping duties on Chinese apple juice imports.

2. From an institutional perspective, what explains the imposition and


the reduction of tariffs for AJC?
From an institutional perspective, the adoption and reduction of tariffs for
AJC is best explained by the institutional premise that institutional rules
and regulations may influence national and international trade flows.
Tariffs lessen trade volume by boosting the cost of goods. For the whole
world, there are no advantageous trade circumstances to refute the daily
trading volume effect. It changes the large competitive advantage
between exporting and importing nations' completed goods in favor of
imported units, allowing foreign firms to enter additional markets. Low
concentrate prices harmed American producers and processors, who
were unable to compete in their home market. The industry in the United
States suffered material damage as a result of low Chinese import prices.
Although China was not the only state supplying low-cost apple juice
concentrate to the US, its arrival into the market seemed to lower prices.

3. Is this form of international trade beneficial to home and host


societies?

This sort of international trade helped customers by supplying them with


high-quality items at reduced prices. So it is a yes in my opinion since it
boosts the producer's profit by enabling them to carry out their
operations. Increased employment rates can also benefit employees.
Trade supports economic development, efficiency, technical
advancement, and, most significantly, consumer welfare. This will also
boost domestic manufacturers by allowing them to make more items and
promote their own products, empowering them to extend their markets.
Trade benefits lower and middle people the most by cutting costs and
broadening the product variety accessible to them.

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