On their own, tariff and trade barriers, if viewed as transitory negotiating tactics, will not significantly change global investment patterns or the structure of global supply chains and employment.
In economies with excess productive capacity, targeted investment can yield a double benefit, generating short-run demand and boosting growth and productivity thereafter.
Reforms aimed at increasing an economy's flexibility are always hard - and even more so at a time of weak growth - because they require eliminating protections for vested interests in the short term for the sake of greater long-term prosperity.
