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The Illusion of Control
Tariffs are dumb. Retaliatory tariffs are dumber.
There’s a certain political theatre to tariffs. They look decisive. They sound tough. They let leaders thump the lectern and declare they’re “standing up for domestic industry”. But strip away the rhetoric and the research is painfully clear: tariffs don’t protect economies - they punish them. And when countries retaliate, everyone loses.
Loss of power
Economists have been shouting this for decades. Tariffs raise prices at home, shrink exports, and slow growth. They act like a tax on your own consumers and your own firms. They make supply chains more expensive, not more resilient. They inflate costs for manufacturers who rely on imported components. They hit low‑income households hardest. This is not ideology - it’s arithmetic.
And yet, the political temptation persists. Tariffs offer the illusion of control in a global economy that feels increasingly unpredictable. They give governments a visible lever to pull, even if it’s the wrong one.
But retaliatory tariffs? That’s where the absurdity becomes self‑harm. When one country slaps on tariffs and another fires back, the result isn’t strength - it’s a slow‑motion trade war in which both sides bleed competitiveness. Exporters lose markets. Importers lose margins. Consumers lose purchasing power. Investment stalls. Inflation rises. Central banks tighten. Growth evaporates.
Retaliation doesn’t restore balance. It accelerates damage.
Protection and punishment
The irony is that the modern economy is too interconnected for tariff brinkmanship to work. Supply chains cross borders dozens of times. Industries depend on global inputs. Punishing your trading partners is, in practice, punishing yourself.
Tariffs are dumb because they don’t achieve what politicians claim. Retaliatory tariffs are dumber because they guarantee the worst‑case outcome.
If leaders truly want to protect their economies, they should stop reaching for the bluntest tool in the drawer - and start engaging with the world as it actually is, not as a campaign slogan imagines it to be.
