In the multipolar world there remains a struggle to stay strong and powerful. The world is no longer dominated by two powerful nations US, and USSR. Today the power struggle remains between multiple countries like US and China are also locking horns against one another.
What is trade war?
A situation in which countries try to damages each other's trade typically by imposition of tariffs or quota restrictions. Going through the history- one of the most famous example of US protectionism came during the great depression after world war 1.
Domestic US businesses faced increased international competition, as well as declining prices due to overproduction. When the stock market crashed in 1929, domestic businesses largely supported protectionist measure and in 1930, president hoover signed the smoot hawley tariff act, which in long run was not successful picture. The second world war also somewhere connected to the issues related to trade.
Domestic US businesses faced increased international competition, as well as declining prices due to overproduction. When the stock market crashed in 1929, domestic businesses largely supported protectionist measure and in 1930, president hoover signed the smoot hawley tariff act, which in long run was not successful picture. The second world war also somewhere connected to the issues related to trade.
Recent Development: US- China Conflict
America and China are two among the powerful countries in the world. Both of them have massive economic, political and military capacities that allow them to project power and influence around the world.
US has been the leading world power on the other hand China is no where considered less powerful nation either. China embarked on three decades of unprecedented economic growth and modernization as well.
America imposed Aluminum and Steel tariffs in early March,2018 in order to protect it's own industries. Some other tariffs imposed by U.S were in the field of aerospace, information and communication technology, and machinery.
After all tariffs imposed by USA, China placed import duty on a wide range of US product. including scrap aluminium ,wine and apples.
Later China came out with more tariffs this time taking aim at Boeing planes. America was entertaining the idea of another 100$ billion in tariffs.
Impacts of the Conflict
Trade war had never been productive for nations in human history. The world is already at stake where constant crisis of Iraq, Syria, Afghanistan and other region of African nations keeps on shaking the economic growth. Open borders have helped in poverty alleviation since globalization.
A positive way ahead
Both countries should come to one platform and negotiate. Imposing tariffs by both the countries can create economic chaos worldwide.
It would impact every nation as world bank has warned that the effect of the increased use of tariffs to regulate international trade could be similar to the significant drop in global trade after the financial crisis.
The ongoing trade war is a lose-lose situation for the warring parties. The only winner will be special interest groups and consumer in countries that do not engage in the tit - for- tat tariff war, but their winning will come at the cost of global growth. It is high time countries worldwide come together to promote the cause of free trade.
