Mexico might retaliate to US tariffs

[Economy 52,861]

8 hours ago, Shyane said:

This is a normal reaction to raising tariff. The only thing, however, though, is that Mexico won't dare to fight the US economically and on any other aspects. China may but whether they will succeed is another question.

I think the general consensus among most experts is that any Country that goes into a trade war with the US will be harmed to a greater degree than the US simply due to the sheer size of the US and the fact that the large US domestic economy will also be more likely to have domestic alternatives to many of the imports

 

However its also agreed that the US being harmed LESS than whoever its fighting with doesnt mean its winning on a net benefit. It will still harm the US a lot more than it helps

 

Trade wars 90% or more of the times harm both sides more than it helps unless its a rare situation where one Country totally benefits from trade and the other one only gets screwed

 

That said Trump may only be using some of these tarrifs as threats like last time or if he places them it would be temporary. He wants to negotiate but knows ultimately they will harm the US too

 

The US also has a sensitive bond market rn that has increased borrowing costs due to concerns over how unsustainable the deficit is. A rise in inflation would cause yields to rise further and could distabalize the financial system

 

So the US has a major weak spot as well as far as trade war power goes as well