"The model predicts a 15.5% GDP contraction under simplified assumptions. Real-world impacts would likely be milder due to exchange rate adjustments, policy responses, and import reductions. This highlights the sensitivity of trade-dependent economies to tariffs and the importance of holistic economic modeling."
And what about the impact on employment?:
"A 15.5% GDP contraction could lead to 8–12 million job losses in Mexico, disproportionately hitting export manufacturing and informal workers. Unemployment rates could surge to 25–30% (including underemployment), with long-term scarring effects on labor productivity and social stability. However, aggressive fiscal/monetary policy, peso depreciation (boosting export competitiveness), and diversification to non-U.S. markets (e.g., EU, Asia) could soften the blow."
Comments
Same question but for Mexico:
"The model predicts a 15.5% GDP contraction under simplified assumptions. Real-world impacts would likely be milder due to exchange rate adjustments, policy responses, and import reductions. This highlights the sensitivity of trade-dependent economies to tariffs and the importance of holistic economic modeling."
And what about the impact on employment?:
"A 15.5% GDP contraction could lead to 8–12 million job losses in Mexico, disproportionately hitting export manufacturing and informal workers. Unemployment rates could surge to 25–30% (including underemployment), with long-term scarring effects on labor productivity and social stability. However, aggressive fiscal/monetary policy, peso depreciation (boosting export competitiveness), and diversification to non-U.S. markets (e.g., EU, Asia) could soften the blow."