Predicting the global future by politicians
TARIFF TROUBLES R ma Countries are panicking, reacting impulsively, and focusing more on immediate disruptions than on long-term economic impacts. However, for meaningful discourse, economists, central banks and political leaders need to assess these developments through a macroeconomic lens. Rma Let us consider three possible international responses to US-imposed tariffs: equal retaliation, asymmetric response and aggressive retaliation. In the first case of equal retaliation -- commonly referred to as a tit-for-tat approach -- Country A imposes equivalent tariffs on US exports in response to US tariffs. In this scenario, both countries experience a reduction in export volumes and higher import prices, leading to a decline in net exports. Rma Now, moving on to soft retaliation, often referred to as an asymmetric response. In this scenario, let us assume Country B imposes less severe retaliatory measures, possibly due to diplomatic ties or strategic restraint. As a result, Count...
