US: The import tariff boomerang

Import tariffs have a negative impact on the targeted country. Retaliation will in turn have negative consequences for the country which started the tariff hikes
Even in the absence of retaliation, there will be negative consequences
Household spending will suffer from a loss of spending power due to an increase in inflation following higher import prices and/or a switch to domestically produced goods
For the same reason, aggregate corporate profits may suffer. Companies may also cut back their investment because of increased uncertainty
Empirical research confirms these outcomes

BNP Paribas Team BNP Paribas

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BNP Paribas Team

BNP Paribas

BNP Paribas Economic Research Department is a worldwide function, part of Corporate and Investment Banking, at the service of both the Bank and its customers.

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