Chapter 8. Chapter 8

Data Exercises
Chapter 8
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Under Headlines: Sugar Could Sweeten U.S. Australia Trans-Pacific Trade Talks, the article discusses U.S. sugar quotas that restrict the import of sugar into the United States and result in sugar prices roughly double the world price of sugar. In this question, you will be asked to use data to determine the relative prices of refined sugar in the world (world price) and in the United States (domestic price).

The source of the data is the U.S. Department of Agriculture, and they are available United States Department of Agriculture. To access the data:

1. Scroll down to “Data set, world and U.S. sugar and corn sweetener prices.”

2. Choose “Table 2—World refined sugar price, monthly, quarterly, and by calendar and fiscal year.” When you select the link, an Excel data set will open.

3. Now select “Table 5—U.S. wholesale refined beet sugar price, Midwest markets, monthly, quarterly, and by calendar and fiscal year.” When you select the link an Excel data set will open.

Question

a. In January 2016, what was the world price per pound in cents for refined sugar?

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Correct answer: 19.05. To find the world price of refined sugar in January 2016, open Table 2, find the year 2016, and then read the price for the month of January.

Question

b. In January 2016, what was the U.S price per pound in cents for refined sugar?

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Correct answer: 32.00. To find the U.S. price of refined sugar in January 2016, open Table 5, find the year 2016, and then read the price for the month of January.
Data Exercises
Chapter 8
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Now you will utilize numerical data to obtain specific information on U.S. sugar quotas and tariffs, using data from the United States International Trade Commission, available United States International Trade Commission. To access the data:

1. Under the text description of the Official Harmonized Tariff Schedule 2017, select “2017 HTSA Preliminary Edition—by chapter.”

2. The page will open to the Harmonized Tariff Schedule (2017 HTSA Basic Edition). Scroll down to “Chapter 17, Sugars and sugar confectionery.” Select the link, which will open a pdf of the chapter.

Question

a. Under Heading 1701, what is the general fare of duty (tariff rate) in cents per kilogram of cane or beet sugar and chemically pure sucrose, in solid form: raw sugar not containing added flavoring or coloring matter, for sugar imports above the quota limit (listed as “Other”)?

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Correct answer: 35.74. To determine the correct answer, look at the tariff rate table, find Heading 1701, look down to find the article description “Other,” and read across to find the general fare of duty (tariff) rate.

Question

b. Under Heading 1701, what is the general fare of duty (tariff rate) in cents per kilogram of cane or beet sugar and chemically pure sucrose, in solid form: raw sugar not containing added flavoring or coloring matter, for sugar imports below the quota limit (listed as “Described in general note 15 of the tariff schedule and entered pursuant to its provisions”)?

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Correct answer: 3.6606. To determine the correct answer, look at the tariff rate table, find Heading 1701, look down to find the article description “Described in general note 15 of the tariff schedule and entered pursuant to its provisions,” and read across to find the general fare of duty (tariff) rate.
Data Exercises
Chapter 8
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Comparing the data from the first two questions, choose the best answer.

Question 8.1

To find the percentage, divide the U.S. price (32.00) by the world price (19.05) and round to the nearest whole number.
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Question 8.2

You would most likely locate your production facilities in the world, not the United States, due to the relatively high cost of sugar in the United States.
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Question 8.3

Only sugar producers benefit, as they receive the higher domestic price for sugar as a result of the quotas and tariffs restricting the import of less-expensive world sugar. Confectioners and soft drink manufacturers use sugar as a primary input for production and therefore will be hurt by quotas and tariffs that restrict imports and raise the price of sugar.
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