Impact of Trade Wars
Economic and Individual Effects
What Is a Trade War?
Protectionism
Governments of countries who enact protectionist trade policies
Government Disputes
As seen in the US-China trade war, if one administration is at odds with another they may begin a trade war
Tariffs and Trade Barriers
Through the use of economic trade tools, countries may restrict and tax imports and exports from specific nations
Negotiations
Both countries send trade representatives to negotiate issues
Trade Practices
These trade wars stem from perceived unfair trade practices such as intellectual property theft
China vs US Trade War
The current US - China trade war is the result of many factors primarily driven by the Trump authority aimed at improving domestic monetary performance and growth. It is in the belief of the US that China has been able to take advantage of global monetary policy and trade policies that have been used to propel developing nation growth despite being a developed nation with a robust economy.
As a result, both the US and Chinese governments have enacted massive trade tariffs across industries on a variety of goods totaling north of $300 billion. These tariffs cover everything from small consumer plastic goods, to automotive machinery, to dairy products.
The tariffs being set have resulted in consumers absorbing price increases on goods, a negative change in global and domestic growth forecasts, and tax-driven bailouts for affected industries such as the dairy industry in the US.
Social Consequences of Trade Wars
Negative Political Relations
It is difficult for both countries to come to agreement and work together on other issues if a trade war exists.
Increasing Consumer Costs and Recession
The cost of goods are increased for consumers making some individuals incapable of paying off debts.
Racism and Anti-China Sentiment
Due to the trade war, there are increasing amounts of anti-Chinese sentiment in the media and between individuals
Solutions
What Can an Average Person Do?
1. Get politically active and vote against presidential administrations that have a negative view on trade wars with China specifically the Trump administration
2. Make smart personal investments and store money away in case the price of goods continues to increase
3. Be mindful that the trade war impacts everyone and an average person is not responsible for these actions
