Foreign Businesses
How do governments attempt to control foreign businesses operating within their borders? When U.S. companies do business in other countries, what issues do they face? Describe the responsibilities and ethical concerns that you feel are important for U.S. companies to consider when doing business in other countries Guided Response: Review your peers posts. Respond to at least two of your classmates by Day 7 explaining whether you agree or disagree with their position. Challenge your classmates by asking a question that may cause them to reevaluate their position. 1st response Jeffrey: Governments control the flow of goods coming into the country by implementing tariffs. Tariffs are defined as a tax imposed by one country on the goods and services imported from another country. More specifically, according to www.investopedia.com (Links to an external site.), There are two types of tariffs: A specific tariff is levied as a fixed fee based on the type of item, such as a $1,000 tariff on a car. An ad-valorem tariff is levied based on the item’s value, such as 10% of the value of the vehicle. Currently in the United States, the country has become very dependent on imported goods. This allows for cheaper prices and a high availability but diminishes to potential growth domestically. It also influences the amount of jobs state side. The creation of the World Trade Organization performs as an international forum that resolves disagreements and implements rules. Also, NAFTA (North American Free Trade Agreement) allows for free trade among Canada, United States and Mexico. Another thing to note is as of 2008 all tariffs and quotas were abolished on U.S. exports to Canada and Mexico. The biggest challenge US businesses operating in other countries is establishing a legal entity overseas, learning different tax situations and understanding local business rules and regulations. Although it may prove to be financially viable for a particular business, it diminishes the amount of potential jobs for Americans and economic growth. 2nd Response Vicki: Governments attempt to control foreign business operations within their borders by creating treaties related to business, such as the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT). NAFTA is an agreement between Canada, the U.T., and Mexico to help alleviate trade barriers. GATT lowered taxes on imported goods and has helped lower barriers to trades (Rogers, 2012). When U.S. companies do business in other countries, they face numerous issues. Companies need to research export laws for goods to ensure restrictions are followed, and products are being sold inappropriate places. Companies need to follow environmental laws to ensure that chemicals and other toxins are not contaminating air, water, and soil. Companies also need to avoid ethical issues like child labor or low wage paying operations like sweatshops by paying a fair wage and ensuring safe working conditions for workers. We need to become more self-reliant and return to manufacturing products in the U.S that are highly consumed by U.S. citizens. During the past eight months of the COVID pandemic, one of the most eye-opening moments was the mad scramble to source PPE. The US has become dependant on other countries to produce the raw materials and the manufacturing process to support our healthcare workers in this crisis. The mass shortage of masks, gowns, shoe covers, and surgical caps brought home our dependence on other countries. Vicki Rogers, S. (2012). Essentials of business law. https://content.ashford.edu/Account/LogOn For more information on Foreign Businesses read this: https://en.wikipedia.org/wiki/Foreign_ownership
