Off-shoring involves relocating production primarily to achieve which objective?

Off-shoring involves relocating production primarily to achieve which objective?

• A. Avoid tariffs
• B. Increase tariffs
• C. Reduce regulatory compliance
• D. Decrease transportation costs

Answer: (A)

Off-shoring is about moving production to another country to lower costs and, in trade terms, to reduce the impact of barriers on sales. Tariffs are charges on imports, so locating production in a market or a country with favorable tariff treatment helps avoid or lessen those costs. Among the options, avoiding tariffs directly targets the cost that tariffs impose on exported goods, making it the best fit. While reduced transportation costs can be a benefit of off-shoring, and the other choices don’t align with the aim, the tariff avoidance motive best captures the primary objective described.

Off-shoring is about moving production to another country to lower costs and, in trade terms, to reduce the impact of barriers on sales. Tariffs are charges on imports, so locating production in a market or a country with favorable tariff treatment helps avoid or lessen those costs. Among the options, avoiding tariffs directly targets the cost that tariffs impose on exported goods, making it the best fit. While reduced transportation costs can be a benefit of off-shoring, and the other choices don’t align with the aim, the tariff avoidance motive best captures the primary objective described.