1. 4.2In words, explain how a potential import-tariff imposed by the European Union would impact UK carmakers.
2. 4.3Suppose that, following Brexit, the UK follows China's footsteps and imposes punitive import tariffs on cars. How would this affect UK car consumers? Why does that scenario seem less sustainable in the UK compared to, say, China? (Hint:The answer to the last question is not related to differences in political regimes between China and the UK.)
3. 4.4Although not explicitly mentioned in the extract above, most UK-based carmakers are sub- sidiaries of foreign-owned multinationals. In the context of the car industry, provide an eco- nomic rationale for vertical and horizontal Foreign Direct Investment (FDI) in the UK. Illustrate your answer with examples of your own making.