Consequences of Trade Restrictions

In the context of international economics, trade restrictions are imposed by governments to regulate international trade between nations. These restrictions can take various forms, such as tariffs, quotas, and export bans, and have significant implications for domestic and global economic welfare. Understanding the motivations and effects of these trade restrictions is crucial for comprehending global trade dynamics.

Consider the case of two countries, Country X and Country Y. Country X implements a tariff on imported steel to protect its domestic steel industry. Concurrently, Country Y experiences a retaliatory tariff on agricultural products it exports to Country X.

Given this scenario, which of the following statements best describes the potential consequences of these trade restrictions?