Tariff policies could backfire, hurting consumers in differentiated markets.
The article looks at how differentiating products affects tariffs in markets with a few big players. It examines the consequences of tariffs under different competing scenarios. The findings suggest that making unique products could reduce the effectiveness of tariffs in one type of competition but increase the usefulness of tariffs in another. Also, when products are more different from each other, companies can make more money from exports, no matter how they're competing. In summary, customizing products can influence how tariffs work in business battles among a small group of companies.