Imagine, Country1 exporting 100 Crore worth stuff. The importing Country2 is buying so as it costs them at least 110 Crores. Now with the Tariff, Country 1 will stop exporting, Country 2 consumer have to Buy at higher cost. Less savings for them.
- Consumer pays higher
- Efficiency unutiilized
- Trades deplete
Thus Tariff can cause Recession!
History
100 years back the Tariff War was there. Later it ended up not in Recession… But Depression!
