Trade War
Trade Wars take place when two or more countries impose tariffs and other restriction on other countries products in order to support their own domestic industries
- Trade Wars tend to follow currency wars
- Primarily involve imposing tariffs on foreign imports
- Intended to increase domestic growth by supporting domestic producers
- Tend to fail when trade is balanced because trading partners implement their own tariffs, thus reducing exports
- Can be more successful for a country with a significant trade deficit with another
- Sometimes can escalate into full on kinetic fighting wars
- Often will result in financial crisis (overall the world is not better off with trade wars)