Tariffs and Emerging Market Economies
How would implementation of tariffs affect EM economies?
Tariffs imposed by the United States would have significant and varied effects on emerging market (EM) countries.
Reduced demand: Tariffs on imports from emerging markets would likely decrease U.S. demand for those goods, leading to lower export volumes and potentially lower prices for emerging market producers.
Increased costs: Tariffs on imported components and technologies raise the overall cost of adopting new innovations, making it more difficult for firms in emerging economies to access and implement cutting-edge technologies.
Reduced foreign investment: Tariffs may discourage foreign companies from investing in emerging economies, limiting the transfer of knowledge and technology that often accompanies such investments.
Decreased competitiveness in global markets: By limiting exposure to international competition, tariffs can reduce the pressure on domestic firms to innovate and improve their products, ultimately making them less competitive globally.
Global growth concerns: Tariff…