After seven years of negotiations, 12 countries—including the United States, Japan, Vietnam, and nine other Pacific Rim countries—crafted the Trans-Pacific Partnership (TPP). A key feature of the TPP was the lifting of tariffs on many products traded between the member countries, ranging from agriculture to footwear. Before the United States ultimately pulled out of the deal, each member country went through the process of ratifying the agreement, with numerous domestic firms and collective interests voicing opposition. In the United States, New Balance was one of these opposing firms, specifically stating its disapproval of phasing out U.S. tariffs on shoes made in Vietnam.  ●      What would a reduction of U.S. tariffs on Vietnamese shoes do to the supply of Vietnamese shoes in the United States? ●      What impact would this have on the equilibrium quantity of shoes sold in the United States? ●      Would the tariff reduction cause the equilibrium price for shoes in the United States to increase or decrease? Please explain.

After seven years of negotiations, 12 countries—including the United States, Japan, Vietnam, and nine other Pacific Rim countries—crafted the Trans-Pacific Partnership (TPP). A key feature of the TPP was the lifting of tariffs on many products traded between the member countries, ranging from agriculture to footwear. Before the United States ultimately pulled out of the deal, each member country went through the process of ratifying the agreement, with numerous domestic firms and collective interests voicing opposition. In the United States, New Balance was one of these opposing firms, specifically stating its disapproval of phasing out U.S. tariffs on shoes made in Vietnam. 

●      What would a reduction of U.S. tariffs on Vietnamese shoes do to the supply of Vietnamese shoes in the United States?

●      What impact would this have on the equilibrium quantity of shoes sold in the United States?

●      Would the tariff reduction cause the equilibrium price for shoes in the United States to increase or decrease? Please explain.