Part 6/9:
The relationship between supply and demand elasticity varies across products, which influences how tariffs affect pricing structures. While the domestic manufacturers might benefit from reduced foreign competition, they are also subject to increased costs for imported components necessary for production. This situation creates a complex balancing act, particularly for industries like automobile manufacturing, where many parts cross borders multiple times during assembly.
Potential retaliatory tariffs from affected countries further complicate this picture, suggesting a deterioration of trade relations into a cycle of hostile economic maneuvers.