Question

1. A U.S. manufacturer wants to sell computer equipment to companies in Honduras. Because the U.S. government limits trade with Honduras, the manufacturer is required to obtain an export license from the Department of Commerce before selling and shipping the equipment to the purchasers. The export license fee is $8,100, not including a nonrefundable application fee of $2,700. What are the possible effects of these fees?

Answer 1

If the US government does not allow the manufacturer to export their products to Honduras, the manufacturer will lose the non-refundable application fee of $2,700 and because the U.S. government limits trade with Honduras, the manufacturer is required to obtain an export license from the Department of Commerce, which can result to a shortage of demand for US products.

In addition, the total value of product exports must not less than $10800 for the duration of the license so that the application and license fee will be worthwhile.