Question

Assume a simple world in which the Japan exports soft drinks and beer to Thailand and imports fish from Thailand. If Japan imposes large tariffs on the Thailand fish, explain the likely impact on the values of the japan beverage firms, Japan fish suppliers, the Thailand beverage firms, and the Thailand fish suppliers.                                                                                                                            

Answer 1

If Japan is going to impose the tariffs on the Thailand fish, then and it would result into increase in the prices of Thailand fish and it would be leading to to an incentive to the Japan fishing industry.

It would hamper the free trade and Thailand would also be retaliate by raising the tariffs on soft drinks and bear which are exported by Japan so over all this will cause the values of Japan beverage companies going down because of retaliation by those Thailand companies, and Japanese fish supplier will be having a better market because they have been provided with reduced competition due to increase of tariff and Thailand beverage companies will also be gaining because there would be retaliatory effect of increase of tariffs on Japan's beverage companies and Thailand fish supplier will be losers because the exports to Japan have declined due to increase in tariffs