What is retaliation in economics?

Answer 1

In economics, retaliation typically refers to actions taken by one entity in response to perceived unfair practices or policies imposed by another, often in the context of international trade. For example, if a country imposes tariffs on imports from another nation, the affected country may retaliate by imposing its own tariffs on goods from the first country. This tit-for-tat approach can escalate into trade wars, impacting global markets, prices, and economic relationships. Retaliation can also occur in other areas, such as labor relations, where employees may respond to unfair treatment from employers.