Higher tariffs would hurt US allies as well as its foes – research
However, research says country would be largely shielded from impact of geopolitical fragmentation
Higher tariffs imposed by the US would have a significant impact on its allies but only a limited impact on the country itself, research from the Bank of Italy suggests.
A discussion paper, published on December 20, uses a multi-country new Keynesian model to study geopolitical fragmentation among four blocs: the US; its allies, including the European Union; China, Russia and aligned states; and neutral countries.
Researchers Alessandro Moro and Valerio Nispi Landi model the impact of increased
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