Based on the information in the case, we can't be reasonably sure that the United States has a comparative advantage in producing motorcycles. Assuming the U.S motorcycle industry includes Harley-Davidson and its suppliers, we know that the U.S. is a less efficient producer than Japan – the Japanese had begun using efficient production techniques such as just-in-time that enabled them to sell their motorcycles at a lower cost. If the U.S. were to have a comparative advantage, it would have to produce motorcycles at a lower opportunity cost than Japan – but we don't know what that opportunity cost (good, service) is. It would also make sense for the U.S to export their motorcycles – they don't, but that could be for many reasons, such as quality problems or trade barriers imposed by the Japanese government.
             If the United States simply no longer has a comparative advantage in producing motorcycles, then economically it would make sense to pull resources out of that industry and put them into industries in which the U.S does have a comparative advantage, specialize in those industries and trade with Japan. America's trading possibilities curve would lie above its production possibilities curve, meaning each country would be better off, in terms of the quantity of goods available for consumption, resources expended and additional output obtained through specialization.
             On the other hand, one must consider the possible short-term implications of such a change. The resulting layoffs would have political and economic repercussions and the country could lose a national icon (Harley-Davidson). Thus imposing tariffs could save some politicians their jobs, and some people would not have to undergo painful unemployment. However, if the Japanese are playing fairly (for example, they are not dumping their product), then in the long-term, it would make sense not to impose tariffs and quotas, as the rea...