<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-4-chapter-02 -->

# Retaliation in Trade Policy

## Definition

The practice of imposing trade restrictions in response to similar measures taken by other nations, often motivated by revenge rather than economic benefit. This creates a cycle of protectionist measures that can harm all parties involved.

## Source Chapter

Book IV, Chapter 2

## Context

Smith examines the French-English trade restrictions as an example of retaliatory trade policies, arguing that such measures often harm the retaliating nation as much as the target. He suggests that retaliation is only justified when there is a reasonable probability of achieving beneficial policy changes.

## Economic Domain

Regulation

---
