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The GM Micro-Challenges are intended to help you appreciate the resources available and challenges associated with international trade. For these assignments, you assume the role of an assistant international trade specialist for an organization that provides export research and assistance to companies. In this capacity, you will engage in research and evaluation related to the specific country (YOUR COUNTRY) and US state (YOUR STATE) which you have been assigned to you for the course. The GM Micro-Challenges involve your responding to memos from your manager. Your responses will require the collection, analysis, and concise provision of the information requested of you in a business memo format. The rubric for this assignment is provided below.

YOUR COUNTRY/YOUR STATE

The list with the country (YOUR COUNTRY) and US state (YOUR STATE) which you have been assigned for the course is in Module 1.

M4 – GM Micro-Challenge: Export Price

Your manager’s memo to you is below. In it your manager is giving you tasks to perform with regard international trade. You are not expected to already know the answers, just be able to find and use the resources available to develop an accurate response.

Your response should use a standard business memo format with the proper headings. An example Micro-Challenge memo is provided

HERE

.

To start, your memo should state its overall purpose, to remind the manager what s/he requested you to do. Next, thoroughly respond to each task you are assigned. For each, briefly restate the task. Then provide a thorough and accurate written response that summarizes the source information you found. Your written response should be supported with (1) images that shows the specific source information you used, and (2) a weblink to each source in case your manager wants to review that information further. Number your responses and respond to the tasks in sequence. Finally, you may choose to provide a conclusion to your memo.

Details on how to insert an image into your micro-challenge using the screenshot or screen clipping tools can be found

HERE

.

Some additional info regarding supporting images:

1. Supporting images do not replace your written response, they only show the source information used.

2. Supporting images should be visible, not be provided as files. Screen clip them and paste them into your memo.

3. Images should be readable – stretch them to make them large enough to be legible in the memo.

___________________________________________________________________________________________________________________

___________________________________________________________________________________________________________________

To:

You

From: Your Manager

Date: June 19, 2022

Subject: Export Price

A client needs to estimate the landed cost for export pricing purposes. Their product – honey packaged for retail sale – is to be exported overseas in about one month from YOUR STATE. They have contacted our organization for help. Choose any country that starts with the same first letter as your last name (or as close as you can get, i.e., Foxx and Finland, etc.). This video on how to determine total export price

HERE

will help.

Your efforts will focus on the four specific tasks below. With your response, include images of all source materials you use and weblinks to them. Some potential sources you might find helpful are provided.

1. Collect the information needed to calculate CIF to the foreign maritime (ocean) port. Show your calculations.

A.

Determine the US’ 10-Digit HS Code for that product. (The Schedule B Search Engine is

HERE

.)

B.

The US company will be shipping a 40′ standard Full Load Container (FCL) of the product to this country. Invoice value of the shipment is $50,000. Insurance is 10% of invoice value.

C. Estimate the cost for ocean freight from YOUR STATE to this country in US dollars. Use the higher end of the price range for your calculations. Identify the US maritime (ocean) port nearest YOUR STATE to the foreign maritime (ocean) port nearest this country. The World Port Source website

HERE

may help. You will need to use ports with “Container Liner Service” which means they can handle shipping containers. Use a freight quote tool like the one on the SeaRates website

HERE

to obtain an approximate price range in dollars between these two shipping ports. Note: Be sure to use a shipping port that handles containers, not an airport, or just a point in the city.

2. Determine tariffs and taxes. Use the higher end of the price range for your calculations.

A. Determine the tariff category used for imports into this country from the US (“General Rate,” “Most Favored Nation” (MFN) Rate, OR “United States of America Rate”). MFN rates apply to WTO members. A list of WTO members can be found

HERE

. A list of countries with Free Trade Agreements with the US which would have a special rate can be found

HERE

.

B. Based on the tariff category, determine the tariff percentage and calculate the duty that would be associated with these imported products. Access the US Country Commercial Guide for this country

HERE

and look under the “Customs, Regulations & Standards” tab for “Import Tariffs”. Use the average tariff rate and calculate it (CIF).

C. Determine the value-added tax (VAT). Access the US Country Commercial Guide for this country

HERE

and look under the “Customs, Regulations & Standards” tab for Import Tariffs or Customs Regulations to get the value-added tax (VAT). You may have to connect to a national website but many have a translation option. Use the average rate and calculate it (CIF+Duty amount).

3. Estimate the landed cost. Show your calculations. This video on how to determine total export price

HERE

will help.

4. What are the import requirements for this country? Which import documents are needed for this country (i.e., how many and which ones)? What are some customs brokers that have offices in this country?

A. Access the US Country Commercial Guide for this country

HERE

and look under the “Customs, Regulations & Standards” tab for “Import Requirements and Documentation”.

B. Visit the website of two customs brokers with offices in this country. Private companies are desired. Detail the services that each company provides. Provide contact information for each.

  
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