Trumps Wirtschaftspolitik in den USA / ZIB 2 vom 02.11.2018 um 22.00 Uhr

Trumps Wirtschaftspolitik in den USA / ZIB 2 vom 02.11.2018 um 22.00 Uhr

 

An Example of Midterm: The Tomato: Vegetable or Fruit?

Today, we had a midterm in the “Marketing Across Borders” course in the McDonough School of Business at Georgetown University. Students were asked to elaborate on the trade consequences of a Supreme Court Decision “Nix vs. Hedden” 1893. Our working title is “The Tomato: Vegetable or Fruit?”.

Here is my summary of the case, please feel free to comment or send us your analysis of this case and I will respond to you. Enjoy!

The Tomato: Vegetable or Fruit?

In 1893, the U.S. Supreme Court grappled with an international legal question that continues to confound to this day — does a tomato qualify as a vegetable or a fruit?

Though many associate the tomato with the stews, salads, and sandwiches that are typically the domain of vegetables, any botanist will tell you that the plant meets the scientific definition of a fruit: a seed-bearing structure that  develops from the ovary of a flowering plant.

But in the U.S. Supreme Court case Nix vs. Hedden, the judges unanimously arrived at a different definition. They ruled that imported tomatoes should be taxed as vegetables, which had a 10 percent tariff when they arrived on American shores, rather than as fruit, which carried no tariff.

Though the court acknowledged that a tomato is technically a fruit, it went on to write that according to the “common” definition most people use, tomatoes fall under the same category as other vegetables such as lettuce, cabbage, and carrots. In other words, a tomato counts as a vegetable because most people thought it was.

A more recent example of changing definitions in trade policy arose during a trade war between Vietnam and the United States that started in 2001. When cheap imports of Vietnamese catfish threatened to put U.S. producers, who had higher costs, out of business, American lobbyists and lawmakers scrambled to find a way to bar Vietnamese producers from the market.

The coalition persuaded Congress that the word “catfish” only applied to U.S. varieties, not Vietnamese imports, even though there was no biological difference between the fish. Thus, when Congress normalized trade relations with Vietnam, its definition of “catfish” excluded basa or tra, the names applied to Vietnamese catfish.

Even today, the questions explored by the Nix v. Hedden case continue to have implications. What does this Supreme Court case – along with the example of the Vietnamese catfish – tell us about trade policy? Who ultimately defines a product, and how could altering definitions affect trade policy? Do tariffs still play a role in modern-day international trade, and can marketers make a difference?

Please analyze this case.

Michael Czinkota teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent. His key book (with Ilkka Ronkainen) is “International Marketing” (10th ed., CENGAGE).

Getting so much stronger all the time

As one observes the international activities of President Trump, one must admire his tenacity, focus, and, let it be said, his successes. Far from isolating himself from the world, as many media reports had suggested, President Trump is becoming increasingly well entrenched in his world leadership role. Far from other leaders running away from him, they increasingly can to rub against his cloth in order to achieve at least symbolic proximity.

I will demonstrate this with two examples taken from his activities in the last five days, taken from the international business field  alone –  alone – so no need to worry about another discussion of the Deputy FBI director’s resignation.: One was the Trump visit to Davos, Switzerland, where business leaders, policy makers and think tank figures met to exchange ideas and plans , combining mostly in the  fields of business, investment, trade, and the macro policies which are promoted to address problems perhaps too large for any country alone. Media sages predicted an outcast Trump with no audience, no interest and no influence.

Well, the contrary occurred. One President Trump had announced his attendance, the list of attendees from other nations was upgraded by title and influence – Trumps presence led to a strengthening of Davos. Those that had referred to the Trump experience of a cold shoulder must have been very chagrined by the discussion between Trump and Klaus Schwab – the founder and head of the World Economic Forum. Schwab showered considerable praise on Trump and his first year achievements, a claim that was widely repeated to high ranking members of business and policy.

In an elegant turnaround, chroniclers of Davos  found one new thought and explanation. Trump is wealthy and in business, so no wonder the other attendees liked him, they are birds of the same feather. No matter that many business people, a year ago, were concerned about what the novice politician would do. Turns out, Trump was not blessed with predicted naiveté, but rather had some meaningful plans, many of which he shepherded forward. Far from being a disaster, Davos was a Trump triumph.

The second example comes from the State of the Union address. Again, many predictions were negative, ranging from limited content to rising attendance boycotts. Well, again something must have been wrong with the crystal ball. The speech was elegant, strong and inspiring. Trump used his great talent as a story teller to introduce modern day heroes to Congress, America and the world, and was able to communicate a feeling of pride, comfort, and leadership. How could anyone avoid applauding – and as we know, when the applause comes you’ve done at least some winning over.

But the strongest part of the President’s speech consisted of what he didn’t say. Let me first tell a story myself. In London, on Jermyn Street I went into a haberdashery to buy a cotton shirt. They were very expensive and I asked the salesman to prove that they were worth the money. He explained that all luxury shirts have some extra buttons sewn in, so that in case of loss, there would be a replacement available. Now come the evidence: His shirts did not have any spare buttons, because theirs did not fall off. The absence of even good things can be of substantial proof.

The speech, about 80 minutes long, had only two minutes worth of comments on trade and globalization. We know how important jobs, international competition and competitiveness are to the President. The lack of mention shows that he is convinced that res ipsa loquitur – things speak for themselves. The economy is not limping along but on a definite fast track. Production sites are re-located back to the United States. Innovation, concentration and investments give our companies and their employees new wings.

So at the end of his first year in office, Trump has reason to be proud and we can accept his moments of exuberance – unusual perhaps but deservedly present.  Let me reiterate what I consider the strongest line in the speech: Americans are dreamers too. Let’s keep it that way!

Michael Czinkota teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent. His key book (with Ilkka Ronkainen) is “International Marketing” (10th ed., CENGAGE).

Can We Really Delete The Past? A British Campaign Aims To Do Just That

What started as a simple idea over two years ago, has grown into a law that very well may be passed through the new Conservative leadership of Britain’s, Theresa May. The new Prime Minister of the UK has been insistent on passing “safeguards” that would allow children, once they turn 18 to delete any derogatory or incriminating former social media posts, photos, and even comments.

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