Question
Victor Consunji owns Southeast Asia's largest Komatsu Heavy Equipment distributorship. There is currently a 25% tariff on his products sold in Thailand. Komatsu Equipment has
Victor Consunji owns Southeast Asia's largest Komatsu Heavy Equipment distributorship. There is currently a 25% tariff on his products sold in Thailand. Komatsu Equipment has a 60 percent share of the Thailand market. The other 40% is dominated by Caterpillar Heavy Industries of the United States. Consunji said, "Imagine what will happen when the 25% tariff comes off our construction equipment, and it remains on the ones from the United States." Under what circumstances will this proposal of Consunji be beneficial, and when will it be harmful to (i) Thailand, (ii) the United States, and (iii) Japan? Will it have repercussions under the GATT-WTO rules? Explain your answer.
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