Unlike the broad way monetary policy affects economic demand, tariffs target a much narrower segment of the economy. Although tariffs can damage the economy, the real damage occurs gradually over time. By raising the price of goods, tariffs reduce the total consumption of some goods and can shift sales to countries that are not targeted by tariffs. Shorter term, too, suppliers exempt from tariffs may not have the capacity to satisfy demand. For example, most agricultural products would sell at a loss if producers lowered prices enough to offset sizeable tariffs.

Source: Forbes March 04, 2019 19:30 UTC