International Business - The Game Theory Behind Trump’s Tariffs | From A Business Professor

Today, we’re diving into an interesting topic: How can game theory explain Trump’s tariff policies and the retaliatory responses from other countries? In recent years, we’ve seen countries around the world engage in trade disputes, imposing tariffs on each other’s goods in an attempt to gain an advantage. But do these policies actually help the economy, or do they end up causing more harm than good? More importantly, why do countries seem to be trapped in this cycle of tariffs and retaliation? To answer these questions, we can turn to game theory, a powerful tool for understanding strategic decision-making. By analyzing the tariff war through the lens of game theory, we can uncover the hidden incentives driving each country’s actions and see why trade wars often lead to outcomes that are worse for everyone involved.