1. Discuss the wisdom of Down Pillow’s decision to switch its source of supply to China. Describe the impact of customs and tariff law on a North American firm’s strategy. Describe how this small company was affected by international political events out of its control. Do you think the company underestimated its customers and its market?

Consider the following NAFTA management problem in a global business context. DownPillow, Inc., a small U.S. manufacturer of down comforters and pillows, sells nationally through high-quality retailers. The company is known for its quality of materials and production. Its raw materials include cotton fabric, unfilled cotton shells, and down fills. These materials are not produced in the United States in sufficient quantities to meet the needs of the U.S. market. The HTS classification for unfilled comforter shells is 6307.90. The classification for finished down comforters is HTS 9404.90.