Trade War
A trade war is an economic
conflict resulting from extreme
protectionism in which states
raise or create tariffs or impose
other in response to trade barriers
createted by the other party. A
trade war happens when one
country relatives against another
by raising import tarrifs or placing
other restrictions on the opposing
country’s imports.
History of Trade Wars
Trade war are not an invention
of modern society. Such battles
have been going on for as long as
nations have conducted trades with
one another. Colonial powers
fought with each other over the
rights to trade exclusively with
overseas colonies in 17th century.
The
British Empire has a long
history of such trade war. An
example can be seen in the opium
wars of the 19th century with China.
The British had been sending Indian
produced opium into China for years
when the Chinese emperor decreed it to be
illegal. Various attempts to settle
the conflicts failed and the emperor
eventually sent troops to
confiscate the drugs. However,
theww might of the British Navy
prevailed and China conceded
additional entry of foreign trade
into the nation.
The First
Anglo-Dutch war
caused by disputes over trade, the
war began with English attacks
on Dutch merchant shipping. The
Second Anglo-Dutch war for
controlling over the seas and
trade routes. The Fourth Anglo-
Dutch disagreements on the legality and
conduct of Dutch trade with
Britain’s enemies in the war. Some
trade wars are mentioned below:
Trade
Wars
|
Period
|
Anglo-Dutch
|
1652-1784
|
Opium
|
1839-1842
and 1856-1860
|
Banana
|
1898-1934
|
Anglo-Irish
|
1932-1938
|
China-US
|
2018-present
|
Causes of Trade Wars
Trade wars can commence if one
country perceives a competitor
nation has unfair trading
practices. Domestic trade unions
of industrial lobbyists create
pressure on politicians to make
imported goods less attractive to
consumers, pushing international
policy towards trade war. Also,
trade wars are often a result of a
misunderstanding of the
widespread benefits of free trade.
A trade
war that begins in one
sector can affect other sectors.
Likewise a trade war that begins
between two countries can affect
other countries not initially
involved in the trade war.
Trade War of US &
China
The world is witnessing a fierce
trade conflict between the US and
China. It all started in January
2018 when US president Donald
Trump ordered a ‘Slection 301’
inquiry against China for
intellectual property theft.
Under
this section, the US
president can take all appropriate
actions, including retaliation, to
obtain the removal of any act,
policy or practice of a foreign
government that violates an
international trade agreement or
is unjustified, unreasonable or
discriminatory and that burdens
or restricts US commerce.
The US
investing committee
concluded that, China’s acts,
policies and practices related to
technology transfer, intellectual
property and innovation are
unreasonable and discriminatory.
Consequently, in April 2018,
the US authority came up with a
list of 1,333 Chinese goods, valued
at USD 50 billion that would be
subject to an additional 25 percent
tariff. China hit back with receiprocal
tariffs on list of American goods of equal value,
matching US threats on a dollar
for dollar basis.
On 1 June
2019, China
retailed with a 25 percent tariff
on USD 60 billion of US products
and on 13 August 2019, Trump
threatened a 10 percent tariff on
Chinese electronics
and clothing.