A trade war refers to two or more nations raising or creating tariffs or other trade barriers on each other in retaliation for other trade barriers. It is the opposite of free trade. // For publications of this name, see also Nation (disambiguation). ... A tariff is a tax placed on imported and/or exported goods, sometimes called a customs duty. ... Barriers to international trade can take many forms, including: import duties import licenses export licenses import taxes tariffs agricultural subsidies non-tariff barriers However, most trade barriers all work on the same principle: the imposition of some sort of cost on trade that raises the price of the traded products. ... Free trade is an economic concept referring to the selling of products between countries without tariffs or other trade barriers. ...
Economists generally believe trade wars are very non-productive and decrease the economic welfare and total social surplus of all nations involved. However, political scientists may see the threat of a trade war as helpful in winning a concession of some sort from the other side.. The term surplus is used in economics for several related quantities. ...
Some economists would agree that some economic protections are more costly than others because they may be more likely to trigger a trade war. For example, if a country were to raise tariffs, then a second country in retaliation would similarly raise tariffs. But increasing, for example, subsidies, is difficult to retaliate against by a foreign country. Many poor countries, for example, do not have the ability to raise subsidies. In addition, poor countries are more vulnerable than rich countries in trade wars; in raising protections against dumping of cheap products, it risks making the product too expensive for its people to afford. This article does not cite its references or sources. ... In economics, dumping can refer to any kind of predatory pricing. ...
A series of articles by Henry C.K. Liu under the heading The Coming Trade War provides an analysis on current problems in global trade.
A tradewar refers to two or more nations raising or creating tariffs or other trade barriers on each other in retaliation for other trade barriers.
Economists generally believe tradewars are very non-productive and decrease the economic welfare and total social surplus of all nations involved.
In addition, poor countries are more vulnerable than rich countries in tradewars; in raising protections against dumping of cheap products, it risks making the product too expensive for its people to afford.
The severity of the impact a tit-for-tat tradewar between the United States and China would have on the global economy may mean cooler heads in Washington and Beijing will prevail.
A tradewar between the main engines of the world economy would be a big negative for growth, and investors would likely seek top-rated government debt and retreat from equity.
Trade dependency between the two powers is intense, as is their interlinking with the rest of the world economy.
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