The US and China came closer to a full-fledged trade war last week when China imposed tariffs of up to 15 percent on key US agricultural exports. This was retaliation for President Trump’s increasing of tariffs on Chinese exports to the United States from 10 percent to 20 percent. China’s retaliatory tariffs show how export-dependent industries are harmed by protectionist policies. Even if other countries refrain from imposing retaliatory tariffs, exporters can still suffer from reduced demand for their products in countries targeted by US tariffs. Businesses that rely on imported materials to manufacture their products also suffer from increased … Continue reading →