Question

If the firm is facing the threat of trade barriers such as high import tariffs or quotas, what actions can it take to mitigate the impact?

1) Diversify its export markets
2) Seek government assistance or subsidies
3) Explore alternative sourcing options
4) Negotiate trade agreements with other countries

Answer 1

To mitigate the impact of trade barriers such as high import tariffs or quotas, a firm can take several actions including diversifying export markets, seeking government assistance or subsidies, exploring alternative sourcing options, and negotiating trade agreements with other countries.

Step-by-step explanation:

When a firm is facing the threat of trade barriers such as high import tariffs or quotas, there are several actions it can take to mitigate the impact:

1. Diversify its export markets: By expanding its customer base to include other countries, the firm can reduce its dependence on a single market and minimize the impact of trade barriers in a specific country.
2. Seek government assistance or subsidies: The firm can explore options for receiving support from the government, such as financial aid or subsidies, to offset the negative effects of trade barriers.
3. Explore alternative sourcing options: The firm can consider finding alternative sources for the goods or services affected by the trade barriers. This may involve searching for suppliers in countries with lower trade barriers.
4. Negotiate trade agreements with other countries: The firm can engage in negotiations with other countries to establish better trade agreements that reduce or eliminate trade barriers.