Tariffs and industrial resilience

A country faces new tariffs and market barriers from a major trading partner, and policymakers must decide how to respond. Analyze the likely short-term and long-term effects on exporters, manufacturers, consumers, inflation, employment, and diplomatic leverage. Then propose a practical response package that balances relief for affected firms with incentives to diversify markets, move up the value chain, and strengthen domestic competitiveness. Include risks of overreacting, underreacting, and using aid that preserves unproductive business models.