In the course of his protectionist policies, US President Trump might attempt to further protect the US market against the rest of the world by means of tariffs and other trade obstacles.  If the US unilaterally increases their import tariffs e.g. by 20 percent, American real earnings would in fact increase slightly.


Non-Tariff trade barriers

But if the non-tariff trade barriers are raised as well – for example maximum quantities of specific import goods or consumer safety standards changed – that again would lead to a loss: because the stronger the American protectionist measures are, the stronger the response.


Retaliatory Measures

A response by the rest of the world with retaliatory measures is to be expected. If these are in effect across all trading partners of the US, there would be enormous consequences for the US economy. Such protectionist measures would massively influence Europe as well: triggering a decline of foreign trade – real incomes per capita would drop in an unknown extent.

See the full story in the third video of our series GED insights that deals with US-protectionism and its results:



Watch our other videos in this series:

What if Trump Implements a Border Tax Adjustment?
What is going to happen, if Trump withdraws from NAFTA?

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