Trump’s tariffs could lead to a range of retaliatory actions, creating a volatile economic period, former Deputy Director of the National Economic Council says.
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00:00Lots of reaction from across the globe. We've got governments from Ottawa to Paris to Tokyo threatening retaliation.
00:07What can they actually do?
00:09Well, there's many things governments can do. Traditionally, when you have these kind of disputes, they can be settled through negotiations.
00:17But I think at this point in time, some of the governments are considering retaliatory tariffs, which would be imposing additional higher tariffs on U.S. products.
00:26Traditionally, they look to some of the most sensitive products, trying to have the maximum political impact and economic harm to the tariffs.
00:36If a country doesn't have the capability, there are some economies that are so small that even if they raise their tariffs to U.S.
00:43products an astronomical amount, it really wouldn't equate to much harm to the United States.
00:50So they might consider other tariffs, other non-tariff measures as well, including denying preferential treatment of products and other benefits they might otherwise bestow on those products in their economy.
01:02So there's a wide ranging number of actions that can be taken in how these governments react will be very important in setting the tone for the next several weeks,
01:13because this will be a very volatile period in trade policy and it could easily have some unexpected consequences.