International Trade Discussion

International Trade Discussion

Q1. Most nations import cars depending on their qualities such as durability, power, and fuel consumption. The production of relatively high-quality vehicles in the US during the 1980s to 1990s period increased their automobile exports because most countries must have ordered more vehicles from the US. On the other hand, imports of Japanese cars must have dropped because the US citizens could get quality vehicles within the US. On the contrary, Japanese importation of American cars must have increased because the American cars had better quality than Japanese produced cars. Lastly, an increase in automobile exportincreased the GDP of the US in the 1980s and 1990s leading to economic growth, which boosted other sectors apart the automobile industry leading to increased export for other goods and services.

Q2. Japanese opening of manufacturing plants in the US meant that the Japanese automobile market had been brought closer home. Consequently, Americans have been buying home-made Japanese cars. In my opinion, this reduced Japanese importation of American cars because the American market is flooded by Japanese vehicles that create the illusion of superiority over American cars regarding quality. Similarly, American export of other goods and services have also reduced because the Japanese have nothing to offer in return.

Q3. The action also limited the number of American cars imported by Japanese because the rule of trade is you get what you give and vice versa. Similarly, exportation of other goods and services was also limited.

Q4. Selling right-hand drive cars to a country whose regulations require left-hand drive would negatively affect export. This is because customer preference is not factored in the sales and therefore the vehicles will remain in yards and car bazaars for an extended period. Similarly, American car sales in Japan must have been meager because they sold cars without considering customer preferences.

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