What measures might other countries do in response to the USA decision to limit trade?

Expert Solution

Responses which other countries might engage in due to the decision of US to limit trade.

1. Increase in tariffs from US exports - Other nations may engage in retaliatory tariffs imposed on US goods, thereby hurting US exports. For example, when US imposed tariffs on Chinese goods then China also imposed tariffs on US goods in its countries.

2. Weakening of geopolitical ties. - Trade wars may have negative effects on relation between two nations as these tariffs signifies lack of trust between then which ultimately result in negative effect on their ties.

3. Currency Wars - Other nations may engage in currency wars as their exports are hurted because of US tariffs. Therefore to support their exports they may devalue their currency. This initial response may induce US to engage in currency war as well.

4. Other nations may reach World trade organisation to file case against US because of its protectionist trade policies.

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Rahul Sunny answered 8 months ago

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