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Are the Chinese illegally subsidizing auto exports? During the presidential election campaign in 2012, the Obama administration filed a complaint against China with the WTO for China providing export subsidies to its auto and auto parts industries. However, the response from U.S. auto companies and auto parts producers was muted. Why not? O They were afraid of retaliation from China They were also receiving subsidies from US government. They were not 100% sure if US could win the case against China. Let’s suppose you (USA dealer) imported 10 BMW (7 series) from a German dealer on March 1, 2018 at € 60,000 each, payable in 30 days. The exchange rate on March 1, 2018 was 1.15 US$/€. Then you sold all of them in the US market at US$75,000 (each MBW) in cash on March 29, 2018. On April 1, 2018, you paid in full to German car dealer at the exchange rate of 1.18 US$/€. For this scenario, what would be the COGS in 2018? O 42,000 750,000 O 18.000 690,000 “Many developing countries have a potential comparative advantage in manufacturing, but new manufacturing industries cannot initailly compete with established industries in developed countries. Thus, governments should temporarily support new industries with tariffs, import quotas… This describes: Strategic trade policy Infant industry argument is a concept which explains that agriculture is an economic activity that are not only produces food and fiber but also creates both tangible and intangible values. O Strategic trade policy Infant industry argument O Multifunctionality