Retaliation by Other Countries

Trade partners often respond with their own tariffs, creating a trade war. This limits exports and disrupts international trade relationships.

Example: China, Mexico, and Canada have all retaliated against U.S. tariffs by imposing their own on American goods like soybeans, machinery, and beverages.

---Reduced Trade Volumes

Tariffs reduce the overall amount of trade because they:

Make goods more expensive,

Encourage local sourcing even if it's less efficient,

Lead to uncertainty and hesitancy in international contracts.

This slows down global supply chains and affects economies that depend heavily on trade (like Germany, China, or even U.S. agricultural states).