Post

Dmitry Grozoubinski
@explaintrade.com

1/ If you target me with tariffs, that's bad for your consumers who have to pay more to buy my products, and it's bad for my producers who will probably sell you fewer things. For my government, the negative impact on your consumers is irrelevant unless it changes your behaviour.

Dmitry Grozoubinski
@explaintrade.com

2/ If I retaliate with tariffs, that's bad for my consumers who will have to pay more for your goods and bad for your producers who will sell me fewer things. It is good for my producers who compete in my market with yours, but that is likely a different group than those hit with your tariffs.

9 reposts106 likes

Dmitry Grozoubinski
@explaintrade.com

3/ In other words, if you hurt both of us by hitting me with tariffs then my only retaliation option basically also consists of hurting us both - which only helps if it brings us to a truce or prevents you escalating further.

Dmitry Grozoubinski
@explaintrade.com

4/ This means that those confronted with a US willing to hurt itself with tariffs have no good options. I think you can make a credible case both for aggressive resistance and for appeasement. Anyone pretending the choice is easy is, in my view, kidding themselves.

Simon Lester
@simonlester.com

Tariffs are problematic, but how about retaliating by allowing violations of copyrights/patents from the country that targeted you with tariffs? Hurts them, helps you! Or place restrictions on their social media companies? Arguably has a similar result!

Dan Gay
@dangay.bsky.social

I completely agree and i've long thought that the countries which in trade negotiations with the US were obliged to adopt onerous and anti-development intellectual property rules should now simply ignore them or amend the legislation.

ItsEasyBeingGreen
@itseasybeinggreen.bsky.social

They may be able to have it both ways with "appeasement" - Americans pay more for stuff they're going to buy anyway, and their own residents may buy less US stuff by choice. Will see if this actually happens anywhere other than Canada though.

Dmitry Grozoubinski
@explaintrade.com

5/ The case for aggressive resistance is that if you can cause the US real economic pain, their public may be less willing to endure it than yours - because you have the more compelling story to tell about being the aggreived party... ... and that such pain will make them back off.

Dmitry Grozoubinski
@explaintrade.com

6/ The counterargument is that the US may escalate considerably and that pain is... well, painful. Additionally, when faced with your resistance the US could simply offer others better deals and leave you locked out of while your competitors devour your market share.

Lasse Westh-Nielsen
@lassewesth.bsky.social

> their public may be less willing to endure it than yours - because you have the more compelling story to tell You can discount that. You will never get that story through to US voters. These are the same people that swallow the whole Epstein thing and all the other canards thrown at them

Mark Sugrue 🇪🇺
@marksugrue.com

Trump may make the choice easier if/when he reneges on his latest deals - as he did with his renegotiated NAFTA deal with Canada and Mexico. The only choice then will be aggressive resistance.