Tariffs: Danger or opportunity for our economy? An expert view!

Tariffs: Danger or opportunity for our economy? An expert view!

The World Trade Organization (WTO) has analyzed in detail the impact of tariffs on the domestic economy. How ZDF reports, chief economist Ralph Ossa published a blog post explaining the complex consequences of tariffs. Ossa argues that tariffs raise prices for imported goods, which can benefit domestic industries that compete with those imports.

However, Ossa underlines that this favoritism diverts labor and capital from the exporting sector, which could have negative long-term effects. Although the upcoming expansion of domestic industries will lead to higher wages, this increase in costs may affect the competitiveness of exporting companies. The introduction of tariffs also reduces domestic demand for the affected products, which ultimately reduces the need for foreign currency and leads to an appreciation of the domestic currency. According to Ossa, empirical studies show that tariffs overall have little impact on aggregate trade imbalances.

Unintended Consequences of Tariffs

Ossa concludes that tariffs not only serve as a source of revenue or protect domestic industries, but can also have far-reaching and often unintended consequences. Short-term benefits arising from tariffs could be outweighed by long-term costs in terms of inflation, competitiveness and international cooperation.

These findings are consistent with reports of hoped-for benefits from tariffs, which are proving unlikely boersennews.de reported. This underlines the need for a differentiated view of the economic conditions under which tariffs are introduced.