V26-19

Question

A coalition of domestic goods manufacturers argues that higher tariffs on imported raw materials will revive local production because firms will switch from cheaper imports to marginally costlier but now tariff-free domestic inputs. However, many of these manufacturers currently depend on imported inputs because they are cheaper and more readily available.
 
Which of the following is an assumption on which the coalition’s argument depends?

A. Higher domestic production costs will not reduce the competitiveness of local firms in international markets.
B. Manufacturers will regard domestic suppliers as reliable enough to restructure their sourcing arrangements around them.
C. The higher tariffs will not prompt foreign governments to retaliate in ways that substantially reduce external demand for domestically manufactured goods.
D. Any short term disruptions caused by switching suppliers will not permanently diminish the willingness of manufacturers to produce goods domestically.
E. Replacing imported raw materials with domestic ones will not reduce the quality of the products local firms manufacture.

bb · Answer

Official Solution:

A coalition of domestic goods manufacturers argues that higher tariffs on imported raw materials will revive local production because firms will switch from cheaper imports to marginally costlier but now tariff-free domestic inputs. However, many of these manufacturers currently depend on imported inputs because they are cheaper and more readily available.
 
Which of the following is an assumption on which the coalition’s argument depends?

A. Higher domestic production costs will not reduce the competitiveness of local firms in international markets.
B. Manufacturers will regard domestic suppliers as reliable enough to restructure their sourcing arrangements around them.
C. The higher tariffs will not prompt foreign governments to retaliate in ways that substantially reduce external demand for domestically manufactured goods.
D. Any short term disruptions caused by switching suppliers will not permanently diminish the willingness of manufacturers to produce goods domestically.
E. Replacing imported raw materials with domestic ones will not reduce the quality of the products local firms manufacture.

The argument says that raising tariffs on imported raw materials will revive local production because firms will switch from foreign inputs to domestic suppliers. But we are also told that imported materials are currently cheaper and more available, which explains why manufacturers prefer them today.
 
For the coalition’s plan to make sense, something must happen after tariffs go up that actually causes this switch. Without the switch, there is no revival. So the assumption we are looking for is the one that keeps this switching mechanism alive.
 
A. Higher domestic production costs will not reduce the competitiveness of local firms in international markets.
 
This may sound important at first, since competitiveness seems like a big factor. But the argument is not talking about export competitiveness at all. It is focused only on whether local production increases. Even if local firms struggle internationally, domestic production could still rise if firms start sourcing locally.
 
Not required. Remove this.
 
 B.  Manufacturers will regard domestic suppliers as reliable enough to restructure their sourcing arrangements around them.
 
 This is the key assumption.  The entire plan depends on manufacturers choosing to switch away from imports after tariffs rise. That choice will only happen if firms feel domestic suppliers are reliable enough to depend on. Reliability here means consistent delivery, the ability to meet demand, and a stable working relationship.
 
If manufacturers doubt domestic suppliers, they will not switch, even if imports become more expensive. And if they do not switch, the plan to revive local production falls apart.
 
C. The higher tariffs will not cause foreign governments to retaliate in ways that reduce external demand for domestically manufactured goods.
 
This brings up international retaliation, but the argument is not about exports. It is about increasing production inside the country. Even if foreign demand falls, firms can still produce more at home if they start sourcing locally.
 
D. Any short term disruptions caused by switching suppliers will not permanently reduce the willingness of manufacturers to produce goods domestically.
 
This sounds relevant because disruptions can affect decisions, but the wording makes it too strong. Even if some firms hesitate or are discouraged for a while, others may still switch. Revival does not require every single firm to remain fully willing or unaffected. It only requires enough firms to switch for local production to rise.
 
E. Replacing imported materials with domestic ones will not reduce the quality of products produced by local firms.
 
This is another trap. It focuses on product quality, but quality is not what the argument is about. The argument only claims that production will revive. Even if quality suffers a little, firms could still increase production volumes by switching to domestic inputs. Quality is not a required condition for revival.

Answer: B

MS01 · Answer

Negation of option D absolutely weakens the argument

Negated D: 
 Any short term disruptions caused by switching suppliers  will  permanently diminish the willingness of manufacturers to produce goods domestically. -- Tells me that manufacturers (at concern) will not switch from foreign to domestic suppliers.

The above clearly weakens the conclusion that " higher tariffs on imported raw materials will revive local production"

What am I missing?

bhanu29 · Answer

Yes, the negated version of D does cast some doubt on conclusion, but it doesn't necessarily destroy the argument.

This shows that companies could switch suppliers and then eventually give up.

but if you consider negation of B, Manufacturers won't regard domestic suppliers as reliable enough to restructure sourcing
The switch doesn't even happen in the first place. Moreover, it not just weakens but completely obliterates the argument.

Hope that helps!!

Thanks,
B

rishabbalai · Answer

I don’t quite agree with the solution. i think the answer should be E.
if it were not of the same quality then the manufacturers will be more reluctant to switch domestic sources

AbhishekP220108 · Answer

Hi  rishabbalai  let me try to help with this one

Look at the structure of argument.

many of domestic goods manufacturers currently depend on imported inputs because they are cheaper and more readily available.

firms will switch from cheaper imports to marginally costlier but now tariff-free domestic inputs--- higher tariffs on imported raw materials will revive local production

Author assumes that domestic inputs is good enough to make manufacturers there consumers when the tariff will be applied on imported goods.

Lets evaluate B and E

B. Manufacturers will regard domestic suppliers as reliable enough to restructure their sourcing arrangements around them.- Negation says "Not reliable enough" if domestic supplier are not reliable enough then there will be no change in changing the supplier and hence there will be no revival....Keep

E. Replacing imported raw materials with domestic ones will not reduce the quality of the products local firms manufacture.- Negation says quality will be reduced, but ask how much? is there a significant change in quality or just a minimal but a manageable one? if it is a manageable one then there is change in supplier, but if the quality is reduced too much then yes changing the supplier is not a good choice. Look how the option directionality changes. This cannot be the MUST BE TRUE one.

Hence B is fine

V26-19

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