strategic trade policy

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A trade policy intended to influence the trade policies of other countries. A policy is said to be strategic if, while it would not be beneficial to adopt it if the policies of all other countries were taken as given, adopting it may be beneficial if it caused other countries to change their trade policies. For example, an export subsidy on a particular good might involve making losses if all other exporting countries continued to supply the world market, but might be beneficial if announcing the subsidy induced some or all foreign competitors to withdraw from the market.

Subjects: Economics.

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