International Trade
Evaluate two of the scenarios listed below and explain the best solution for each. Include comments related to any ethical issues that arise. Support your responses with appropriate cases, laws and other relevant examples by using at least one scholarly source
Scenario —International Trade
The Director of Purchasing for parts distribution company wants to purchase steel coach screws from Germany; however, he is not sure what the best option is. The director comes to you and asks your opinion. You know that Germany, Canada, and Korea are the best sources for obtaining this product. While your research shows coach screws from Germany are of the highest quality, the United States imposes a tariff of 12.5%, which makes this option noncompetitive.
- Which US trade laws should you consider when selecting a country?
- Is there any way by which you can seek a reduction on the tariff? If so, how? If not, why?
- Select an alternative country (Canada or Korea) for purchasing the coach screws and explain your reasons for selecting the country.
Scenario 2 – Bribery
Slyce Pizza Company purchased four commercial refrigerators for the restaurants and eight pizza ovens from a supplier in Italy. Between the shipping costs, delays, and unanticipated duties, the purchasing manager was worried that his boss would be upset about the total costs. In an effort to reduce costs, the manager offered a US Customs officer $500 in cash to re-classify the imported goods to reduce the amount of duties owed.
- Analyze the legal and ethical ramifications of the purchasing manager’s offer to the customs official?
- Would it make a difference if the purchasing manager offered to donate $500 to St. Jude Children’s Research Hospital if the officer expedited the paperwork necessary to release the goods from custom’s custody?