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To avoid the Risks of Overspecialisation

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To avoid the Risks of Overspecialisation

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https://www.economicshelp.org/blog/13071/economics/venezuela-economy-and-oil-dependency/

The Governments wants to limit specialization if it means that the country could become over-dependent on the export sales of one or two products. If a change in the world market for these products has serious consequences for the country it is over-specialized.

The introduction of new products or changes in pattern demands can have a large effect on economies of developing countries (usually over specialised on production of primary products).

There are no arguments against this issue existing, this problem is just the creation of specialised countries and the obvious effects it will have.

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Introduction

Venezuela, home to the world's largest oil reserves, is a case study in the perils of becoming a petrostate. Since it was discovered in the country in the 1920s, oil has taken Venezuela on an exhilarating but dangerous boom-and-bust ride that offers lessons for other resource-rich states. Decades of poor governance have driven what was once one of Latin America's most prosperous countries to economic and political ruin.

Venezuela has suffered economic collapse in recent years, with output shrinking by three-quarters and rampant hyperinflation contributing to a scarcity of basic goods. Meanwhile, government mismanagement and U.S. sanctions have led to a drastic decline in oil production and severe underinvestment in the sector. But Caracas hopes that Washington's 2022 decision to allow U.S. oil giant Chevron to resume operations in the country could signal a potential détente.

What is a petrostate?

Petrostate is an informal term used to describe a country with several interrelated attributes:

government income is deeply reliant on the export of oil and natural gas,

economic and political power are highly concentrated in an elite minority, and

political institutions are weak and unaccountable, and corruption is widespread.

Countries often described as petrostates include Algeria, Cameroon, Chad, Ecuador, Indonesia, Iran, Kazakhstan, Libya, Mexico, Nigeria, Oman, Qatar, Russia, Saudi Arabia, the United Arab Emirates, and Venezuela.

What's behind the petrostate paradigm?

Petrostates are thought to be vulnerable to what economists call Dutch disease, a term coined during the 1970s after the Netherlands discovered natural gas in the North Sea.

In an afflicted country, a resource boom attracts large inflows of foreign capital, which leads to an appreciation of the local currency and a boost for imports that are now comparatively cheaper. This sucks labor and capital away from other sectors of the economy, such as agriculture and manufacturing, which economists say are more important for growth and competitiveness. As these labor-intensive export industries lag, unemployment could rise, and the country could develop an unhealthy dependence on the export of natural resources. In extreme cases, a petrostate forgoes local oil production and instead derives most of its oil wealth through high taxes on foreign drillers. Petrostate economies are then left highly vulnerable to unpredictable swings in global energy prices and capital flight.

The so-called resource curse also takes a toll on governance. Since petrostates depend more on export income and less on taxes, there are often weak ties between the government and its citizens. Timing of the resource boom can exacerbate the problem. "Most petrostates became dependent on petroleum while, or immediately after, they were establishing a democracy, state institutions, an independent civil service and private sector, and rule of law," says Terry Lynn Karl, a professor of political science at Stanford University and author of The Paradox of Plenty, a seminal book on the dynamics of petrostates. Leaders can use the country's resource wealth to repress or co-opt political opposition.

How does Venezuela fit the category?

Venezuela is the archetype of a failed petrostate, experts say. Oil continues to play the dominant role in the country's fortunes more than a century after it was discovered there. The oil price plunge from more than $100 per barrel in 2014 to under $30 per barrel in early 2016 sent Venezuela into an economic and political spiral, and despite rising prices in recent years, conditions remain bleak.

A number of grim indicators tell the story:

Oil dependence. Oil exports are expected to finance almost two-thirds of the government's budget in 2023, a slightly higher proportion compared to the previous year.

Falling production. Starved of adequate investment and maintenance, oil output has continued to generally decline, dropping by 2.5 percent in 2022 after increasing slightly the previous year. In 2020, it had reached its lowest level in decades.

Spiraling economy. Venezuela's gross domestic product (GDP) shrank by roughly three-quarters [PDF] between 2014 and 2021. However, the economy grew by an estimated 6 percent in 2022, and experts forecast additional growth of 6.5 percent in 2023.

Soaring debt. Venezuela has an estimated debt burden of $150 billion or higher.

Hyperinflation. Annual inflation skyrocketed to just over 130,000 percent in 2018, and though it has slowed in recent years, it remained at 234 percent in 2022.

Growing autocracy. Over the last decade, President Nicolas Maduro and his allies have violated basic tenets of democracy to maintain power. This includes restricting internet access and arbitrarily prosecuting and detaining political opponents and critics.

These issues-coupled with international sanctions and the COVID-19 pandemic-have fueled a devastating humanitarian crisis, with severe shortages of basic goods such as food, drinking water, gasoline, and medical supplies. According to a November 2022 survey, 50 percent of Venezuela's 28 million residents live in poverty, though that is down from 65 percent the year before.

Since 2014, more than seven million Venezuelan refugees have fled to neighboring countries and beyond, where some governments have granted them temporary residency. However, about 150,000 Venezuelan migrants have returned home since the pandemic began, often after losing their jobs in other Latin American countries.

How did Venezuela get here?

A number of economic and political milestones mark Venezuela's path as a petrostate.

Discovering oil. In 1922, Royal Dutch Shell geologists at La Rosa, a field in the Maracaibo Basin, struck oil, which blew out at what was then an extraordinary rate of one hundred thousand barrels per day. In a matter of years, more than one hundred foreign companies were producing oil, backed by dictator General Juan Vicente Gómez (1908-1935). Annual production exploded during the 1920s, from just over a million barrels to 137 million, making Venezuela second only to the United States in total output by 1929. By the time Gómez died in 1935, Dutch disease had settled in: the Venezuelan bolívar had ballooned, and oil shoved aside other sectors to account for over 90 percent of total exports.

Reclaiming oil rents. By the 1930s, just three foreign companies-Royal Dutch Shell, Gulf, and Standard Oil-controlled 98 percent of the Venezuelan oil market. Gómez's successors sought to reform the oil sector to funnel funds into government coffers. The Hydrocarbons Law of 1943 was the first step in that direction, requiring foreign companies to give half of their oil profits to the state. Within five years, the government's income had increased sixfold.

Punto Fijo pact. In 1958, after a succession of military dictatorships, Venezuela elected its first stable democratic government. That year, Venezuela's three major political parties signed the Punto Fijo pact, which guaranteed that state jobs and, notably, oil rents would be parceled out to the three parties in proportion to voting results. While the pact sought to guard against dictatorship and usher in democratic stability, it ensured that oil profits would be concentrated in the state.

OPEC. Venezuela joined Iran, Iraq, Kuwait, and Saudi Arabia as a founding member of the Organization of the Petroleum Exporting Countries (OPEC) in 1960. Through the cartel, which would later include Qatar, Indonesia, Libya, the United Arab Emirates, Algeria, Nigeria, Ecuador, Gabon, Angola, Equatorial Guinea, and the Republic of Congo, the world's largest producers coordinated prices and gave states more control over their national industries. That same year, Venezuela established its first state oil company, the Venezuelan Petroleum Corporation, and increased oil companies' income tax to 65 percent of profits.

The 1970s boom. In 1973, a five-month OPEC embargo on countries backing Israel in the Yom Kippur War quadrupled oil prices and made Venezuela the country with the highest per-capita income in Latin America. Over two years, the windfall added $10 billion to state coffers, giving way to rampant graft and mismanagement. Analysts estimate that as much as $100 billion was embezzled between 1972 and 1997 alone.

PDVSA. In 1976, amid the oil boom, President Carlos Andrés Pérez nationalized the oil industry, creating state-owned Petróleos de Venezuela, S.A. (PDVSA) to oversee all exploring, producing, refining, and exporting of oil. Pérez allowed PDVSA to partner with foreign oil companies as long as it held 60 percent equity in joint ventures and, critically, structured the company to run as a business with minimal government regulation.

The 1980s oil glut. As global oil prices plummeted in the 1980s, Venezuela's economy contracted and inflation soared; at the same time, it accrued massive foreign debt by purchasing foreign refineries, such as Citgo in the United States. In 1989, Pérez-reelected months earlier-launched a fiscal austerity package as part of a financial bailout by the International Monetary Fund. The measures provoked deadly riots. In 1992, Hugo Chávez, a military officer, launched a failed coup and rose to national fame.

Chávez's Bolivarian revolution. Chávez was elected president in 1998 on a socialist platform, pledging to use Venezuela's vast oil wealth to reduce poverty and inequality. While his costly "Bolivarian missions" expanded social services and cut poverty by 20 percent, he also took several steps that precipitated a long and steady decline in the country's oil production, which peaked in the late 1990s and early 2000s. His decision to fire thousands of experienced PDVSA workers who had taken part in an industry strike in 2002-2003 gutted the company of important technical expertise. Beginning in 2005, Chávez provided subsidized oil to several countries in the region, including Cuba, through an alliance known as Petrocaribe. Over the course of Chávez's presidency, which lasted until 2013, strategic petroleum reserves dwindled and government debt more than doubled [PDF].

Chávez also harnessed his popularity among the working class to expand the powers of the presidency and edged the country toward authoritarianism: he ended term limits, effectively took control of the Supreme Court, harassed the press and closed independent outlets, and nationalized hundreds of private businesses and foreign-owned assets, such as oil projects run by ExxonMobil and ConocoPhillips. The reforms paved the way for Maduro to establish a dictatorship years after Chávez's death.

Descent into dictatorship. In mid-2014, global oil prices tumbled, and Venezuela's economy went into free fall. As unrest brewed, Maduro consolidated power through political repression, censorship, and electoral manipulation. In 2018, he secured reelection in a race widely condemned as unfair and undemocratic. Nearly sixty countries, including the United States, subsequently recognized opposition figure Juan Guaidó, head of the National Assembly, as Venezuela's interim leader.

For over a decade, Washington has imposed sweeping sanctions against Caracas, the most significant of which have blocked oil imports from PDVSA and prevented the government from accessing the U.S. financial system. Still, Venezuela has retained oil-trading partners, and analysts say that support from China, Cuba, Iran, Russia, and Turkey is keeping the Maduro regime afloat.

In January 2021, Maduro and his allies took leadership of what was the last opposition-controlled power center in the government, the National Assembly, after claiming victory in legislative elections. The opposition, including Guaidó, boycotted the vote, alleging that it was fraudulent, a charge reaffirmed by the Joe Biden administration and other foreign governments and international bodies, including Canada, the European Union, and the Organization of American States. However, regional elections that November further cemented Maduro's power and saw the fractured opposition win only three of twenty-three available governorships. Then in December 2022, after years of waning support, the opposition voted to remove Guaidó and dissolve his government, with plans to hold fresh presidential primaries in October 2023.

Meanwhile, there are some signs of a thaw. In November 2022, in part to help offset rising global energy prices due to the war in Ukraine, the United States permitted U.S. oil giant Chevron to resume limited operations in the country. In exchange, the Maduro government and the opposition agreed to continue dialogue following a yearlong stalemate. Still, given the dilapidated state of its industry, experts say it could be years before Venezuela's oil exports rise significantly.

Is there a path away from the oil curse?

A country that discovers a resource after it has formed robust democratic institutions is usually better able to avoid the resource curse, analysts say. For example, strong institutions in Norway have helped the country enjoy steady economic growth since the 1960s, when vast oil reserves were discovered in the North Sea, Karl writes in her book. In 2023, officials project that the petroleum sector will account for 33 percent of Norway's GDP. Strong democracies with an independent press and judiciary help curtail classic petrostate problems by holding government and energy companies to account.

If a country strikes oil or another resource before it develops its state infrastructure, the curse is much harder to avoid. However, there are remedial measures that low-income and developing countries can try, provided they are willing. For instance, a government's overarching objective should be to use the oil earnings in a responsible manner "to finance outlays on public goods that serve as the platform for private investment and long-term growth," says Columbia University's Jeffrey Sachs, an expert on economic development. This can be done financially, with broad-based investing in international assets, or physically, by building infrastructure and educating workers. Transparency is essential in all of this, Sachs says.

Many countries with vast resource wealth, such as Norway and Saudi Arabia, have established sovereign wealth funds (SWF) to manage their investments. Globally, SWFs manage more than $10 trillion worth of assets.

Analysts anticipate that a global shift from fossil fuel energy to renewables such as solar and wind will force petrostates to diversify their economies. Nearly two hundred countries, including Venezuela, have joined the Paris Agreement, a binding treaty that requires states to make specific commitments to mitigate climate change.

Economic diversification will be an especially difficult climb for Venezuela given the scale of its economic and political collapse over the last decade. The country would likely need to revitalize its oil sector before it could cultivate and develop other important industries. But this would take enormous investment, which analysts say would be hard to come by given Venezuela's unstable political environment, trends in oil demand, and rising concerns about climate change.

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opec (organization of the petroleum exporting countries)

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Venezuela: The Rise and Fall of a Petrostate

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Venezuela's descent into economic and political chaos in recent years is a cautionary tale of the dangerous influence that resource wealth can have on developing countries.

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China recently imposed preliminary anti-dumping of up to 62% on pork imports from the European Union, saying that EU producers were selling pork below its normal value and harming China’s domestic industry. It was intended to prevent dumping, makes EU pork more expensive in China and reduces import competition, helping Chinese pork producers by raising domestic prices and protecting local jobs. However it affects the EU farmers who lose access to one of their largest markets, and could lead to higher consumer prices in China, damage welfare in the EU, create inefficiency and lead to trade wars.

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China to impose preliminary anti-dumping duties on pork from EU

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China has announced provisional anti-dumping duties of up to 62.4% on pork imports from the European Union.

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Protecting the Economy from Low cost labor

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Protecting the Economy from Low cost labor

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China probes US, Mexican pecan imports, Mexico's restriction measures

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China probes US, Mexican pecan imports, Mexico's restriction measures

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China investigates Mexico's tariffs amid trade tensions

Mexico defends tariffs as protection for local industry

Analysts see Beijing's move as response to Mexico's planned tariffs

BEIJING, Sept 25 (Reuters) - China's commerce ministry initiated an anti-dumping investigation into pecans imported from the United States and Mexico on Thursday, signalling more global trade tensions and increased friction with the two nations.

Beijing's move came as Mexico proposed to raise tariffs on goods across multiple sectors, including textiles, steel and automotive, from China and other countries, and as China and the U.S. eye further talks in a bid to ease their trade dispute.

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The investigation is expected to conclude by September 25, 2026, with a possible six-month extension under special circumstances, China's commerce ministry said in a statement.

It said preliminary evidence showed Mexican and U.S. pecans were exported and sold to China at prices lower than their normal value and causing material injury to its domestic industry.

CHINA INVESTIGATES MEXICO'S TARIFFS

Separately, China launched an investigation on Thursday into Mexico's tariffs and other trade restrictive measures against China, saying they will damage the interests of its trade partners and reduce confidence in investing there.

"China believes against the backdrop of the U.S. abusing tariffs, all countries should jointly oppose all forms of unilateralism and protectionism, and must never sacrifice the interests of third parties due to coercion from others," a Chinese commerce ministry spokesperson said in a statement.

In a statement on Thursday evening, Mexico's economy ministry said it was aware of the probe and that all its trade decisions complied with the maximum tariff limits set by the World Trade Organization, adding that the measures were motivated by the need to protect Mexican industry and workers.

"Mexico's recent decisions stem from a legitimate national interest, not external pressures, nor from any geopolitical considerations," the ministry said, adding that it had invited Chinese officials to send a delegation to Mexico to discuss the tariffs.

Analysts say such measures from Beijing are expected after Mexico's planned tariffs, and the Chinese commerce ministry indicated it viewed the move as Mexico giving in to U.S. coercion.

"As usual, agricultural products are proving an easy target," said Even Rogers Pay, an analyst at Beijing-based Trivium China who specialises in agriculture.

"By lumping U.S. and Mexican pecans together in the same investigation, the ministry of commerce creates the prospect for Mexico's government to compromise and gain a big advantage for pecans in China's market relative to U.S. growers," she said.

Trade relations between China and the U.S. are growing more unpredictable, as Beijing earlier on Thursday added six U.S. firms to its export control and unreliable entity lists, at a time when the world's two largest economies seek to negotiate a durable trade deal.

Reporting by Yukun Zhang, Shi Bu and Ryan Woo; Additional reporting by Ana Isabel Martinez and Brendan O'Boyle in Mexico City; Editing by Bernadette Baum, Ed Osmond and Michael Perry

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China probes US, Mexican pecan imports, Mexico's restriction measures

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China's commerce ministry initiated an anti-dumping investigation into pecans imported from the United States and Mexico on Thursday, signalling more global trade tensions and increased friction with the two nations.

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Federico

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Trade wars, Trump tariffs and protectionism explained

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Tariffs and protectionism - what do President Trump's new policies mean and what will they do?

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US Zero Tarrif Rice Imports could flood Taiwans Rice market and lead to irreversible market damage

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US Zero Tarrif Rice Imports could flood Taiwans Rice market and lead to irreversible market damage

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US NEGOTIATIONS: Zero-tariff US rice imports could harm Taiwan's rice industry, farming groups said, while urging reforms to the public grain purchasing system

By Yang Yuan-ting and Sam Garcia / Staff reporter, with staff writer

As Taiwan enters the fourth round of tariff negotiations with the US, domestic farming groups issued a joint statement yesterday warning that importing cheap US rice under a zero-tariff arrangement would flood the market and cause irreversible harm to Taiwan's rice industry.

The statement also called for reforms to the public grain purchasing system, advocating for a shift from a focus solely on quantity to a tiered pricing model that prioritizes quality.

Countries that have secured relatively low tariffs from the US, such as the UK, Japan, Vietnam and the Philippines, have fully opened their markets to US agricultural products.

Photo: Taipei Times

In contrast, South Korea has not agreed to import US rice and other agricultural products without restrictions, and its tariff rate is at 25 percent.

As the negotiating team, led by Vice Premier Cheng Li-chiun (鄭麗君), enters its fourth round of trade talks with Washington, President William Lai (賴清德) on Wednesday said that the aim is to protect Taiwan's national interests, domestic industries, public health and food security.

While other countries with low tariffs have opened their markets to US agricultural products, domestic farmers' groups expressed concern over the negative impact that would have on the local agricultural industry.

Citing Japan's experience, where the opening of its rice market severely affected local farmers, the groups said that rice should remain a non-negotiable red line in negotiations with the US.

They said that the mass importation of cheap US rice would devastate Taiwan's domestic rice industry, contribute to rural decline and collapse the food system, leading to an irreversible disaster.

The groups also outlined the challenges faced by the industry, saying that Taiwan is the only country globally to maintain a public rice purchasing system, where the government buys rice at a fixed price regardless of quality.

This system has reached its price ceiling and does not incentivize high-quality rice production, discouraging farmers from growing premium rice, they said.

Instead of focusing solely on quantity, the system should be reformed to reward rice quality through a tiered pricing structure, offering farmers higher returns for producing high-quality rice, they said.

This would also reduce the use of fertilizers and pesticides to better protect Taiwan's environment, they added.

Taiwan should continue expanding its rice processing efforts, including producing rice flour to replace imported wheat flour and utilizing rice in brewing, which would increase the added value of Taiwan's rice and open up markets, they said.

The statement called on the Democratic Progressive Party-led administration to stand firm on rice as a red line in trade talks, saying that rice is a strategic crop and not a bargaining chip.

It also urged reforms to the public rice purchasing system, advocating for the introduction of tiered pricing and quality incentives, while strengthening regional contract models to assist farmers with production, processing and marketing, thereby enhancing the resilience and value of Taiwan's rice industry.

Farmers' markets and groups supporting the statement include Hope Market, Water Garden Organic Farmers' Market, East City Farmers' Market, Tri-Small Market, the Taiwan Organic Food and Agricultural Education Association, the Taiwan Green Market Association, Wan Yao Market, Hualien Farmers' Market, Exploring Flavors of Eastern Taiwan and the Taiwan Good Rice Circle Association.

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Farmers urge rice trade protection - Taipei Times

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Bringing Taiwan to the World and the World to Taiwan

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EU seeks to push plant capacity usage to more viable 80%

Tariff-free import quotas to be 47% lower than in 2024

EU steel sector welcomes move, UK expresses concern

EU open to ring-fencing steel sector with like-minded partners

BRUSSELS, Oct 7 (Reuters) - The European Commission proposed on Tuesday cutting tariff-free steel import quotas by almost half and a 50% duty for excess shipments in a bid to preserve viable steelmaking in the European Union.

Due to rising imports and U.S. tariffs, EU steel producers are operating at only 67% of capacity and the new measures, in line with those reported by Reuters last week, are designed to push that up towards 80%.

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EU steel is currently protected by safeguards that cap imports of 26 steel grades, with 25% tariffs above those limits. However, they have steadily risen each year despite declining demand and, under World Trade Organization rules, must expire in mid-2026.

EU STEELMAKERS HAPPY, BRITAIN CONCERNED

The Commission is now proposing a tariff-free import volume of 18.3 metric tons a year, down 47% from 2024 quotas, and a doubling of the out-of-quota duty to 50%, in line with Canada and the United States, though the latter's tariffs apply from the very first ton.

The Commission said the quota volumes would match imports from 2013, when it says overcapacity began. The measures, which will require approval by EU governments and the European Parliament, will also require importers to show proof of the origin of their steel.

Axel Eggert, director general of European steel association Eurofer, said the measures would cut imports to a 15% market share and were the vital step the industry was seeking, potentially saving hundreds of thousands of jobs.

The bloc will also need to enter negotiations with WTO partners, the outcome of which could be tariff-free allocations. Only European Economic Area countries Iceland, Liechtenstein and Norway will be exempt.

Britain, the eighth-largest exporter of steel to the EU, said it was pushing Brussels for urgent clarification.

"It's vital we protect trade flows between the UK and EU and we will work with our closest allies to address global challenges rather than adding to our industries' woes," Industry Minister Chris McDonald said in a statement.

Director General of UK Steel Gareth Stace told Times Radio the impact would be devastating.

The top exporters of steel to the EU in 2024 were Turkey, India, South Korea, Vietnam, China, Taiwan and Ukraine.

The new system could help secure a deal with the United States to replace 50% U.S. tariffs with a quota system, as outlined in the U.S.-EU deal at the end of July.

The EU hopes like-minded partners will cooperate to address overcapacity, which could involve ring-fencing their respective production from China in particular.

Reporting by Philip Blenkinsop, additional reporting by Catarina Demony in London; editing by Emelia Sithole-Matarise

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EU to halve steel import quotas to preserve domestic industry

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The European Commission proposed on Tuesday cutting tariff-free steel import quotas by almost half and a 50% duty for excess shipments in a bid to preserve viable steelmaking in the European Union.

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What the tariffs on Chinese electric vehicles tell us about the differences in EU and U.S. trade policy — The Fletcher Forum of World Affairs

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By Jake Edwards During the first quarter of 2025, the global economy was shaken by the new administration’s decision to impose high tariffs on most goods imported into the United States from nearly all countries on earth, blatantly violating WTO rules . While many were shocked by the unprec

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Tariffs threaten U.S. steel and aluminum supply chains - Cipher News

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China, Canada and Mexico are the largest suppliers of steel and aluminum products to the United States.

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Trump says he’s increasing tariffs on Canada by 10% after Ontario’s Reagan ad | CNN Business

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President Donald Trump said Saturday he is increasing the tariff on Canada by 10% over current levels, further escalating trade tensions over what he called a “fake” ad that featured parts of an anti-tariff speech by former President Ronald Reagan in 1987.

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- This is when countries sometimes set safety, health, or environmental rules on imports to make sure foreign goods meet the same quality as local products.

-The WTO allows this if the rule is based on scientific proof and treats all countries fairly.

-If a country bans a product because it’s unsafe, that’s allowed but if it uses safety rules just to block competition, it’s called hidden protectionism.

Summary of the article:

-The UK and US trade deal gives American beef a quota of about 13,000 metric tonnes into Britain, but the UK made clear it will keep its ban on hormone-treated beef. The UK farmers’ union accepted this, noting their food safety standards remain protected and that UK producers aren’t undercut by lower-standard imports.

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Britain’s farmers welcome no weakening of import standards in US-UK deal

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Britain’s farmers union gave Thursday’s U.S.-UK economic deal a mixed reception, welcoming the retention of British food standards on U.S. imports and reciprocal market access for beef, but flagging concern over a removal of tariffs on bioethanol.

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1. Unfair Competition Due to Cost Differences

In some developing countries, labor costs are extremely low, allowing these countries to export goods at lower prices.

For developed countries or those with higher labor costs, local businesses struggle to compete with these low-priced imports, potentially leading to a decline in local manufacturing, bankruptcies, and increased unemployment.

Therefore, governments use tariffs, quotas, and other means to protect domestic industries from "low-price shocks."

2. Preventing Industrial Relocation and "Deindustrialization"

Without protection, companies may relocate their production bases to low-wage countries to reduce costs, resulting in job losses and industrial hollowing out.

In the long term, this could weaken a country's industrial base and economic autonomy.

3. Protecting Workers' Income and Social Stability

Low-cost imports can depress prices in domestic industries, indirectly lowering wages or causing unemployment.

Large-scale unemployment or income decline could trigger social instability and reduced consumer spending, further dragging down the economy.

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What are tariffs, which countries is Trump targeting and will prices rise?

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The cost of cars, fruit and pharmaceuticals could increase because of Trump’s tariff announcement.