INTERNATIONAL TRADE

Tariff

Scenario

One area in which you are assisting is in the setup of business development in Central and South America for Navigation Systems, Inc. (NSI). The firm has negotiated the framework of supplying $40 million per year (in U.S. dollars) in navigations systems for Auxiliary Aircraft in Brazil for 10 years. If the products are manufactured in the United States and delivered to Brazil, then there will be a 5% import tariff on $40 million in product. As an alternative, the Brazilian government has offered to pay for all costs associated with building and locating a manufacturing plant in Brazil to ...