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{{Short description|Economic conflict using tariffs or other trade barriers}}
{{for|the computer game|Trade Wars}} {{For|the computer game|Trade Wars}}
{{trade bloc}} {{Trade bloc}}


A '''trade war''' is an economic conflict resulting from extreme ] in which ]s raise or create ]s or other ]s against each other in response to trade barriers created by the other party.<ref>{{Cite web|url=http://www.businessdictionary.com/definition/trade-war.html|title=What is trade war? definition and meaning|website=BusinessDictionary.com|language=en|access-date=2017-08-15}}</ref> Increased protection causes both nations' output compositions to move towards their ] position.<ref>{{cite web|url=http://www.investopedia.com/terms/t/trade-war.asp|title=Trade War|first=Investopedia|last=Staff|date=28 September 2009}}</ref> A '''trade war''' is an ] often resulting from extreme ] in which ]s raise or create ]s or other ]s against each other in response to trade barriers created by the other party.<ref>{{Cite web|url=http://www.businessdictionary.com/definition/trade-war.html|title=What is trade war? definition and meaning|website=BusinessDictionary.com|language=en|access-date=2017-08-15|archive-date=2018-06-21|archive-url=https://web.archive.org/web/20180621043058/http://www.businessdictionary.com/definition/trade-war.html|url-status=dead}}</ref> If tariffs are the exclusive mechanism, then such conflicts are known as '''customs wars''', ''toll wars'', or ''tariff wars''; as a reprisal, the latter state may also increase the tariffs. Trade war arises only if the competitive protection between states is of the same type and it is not valid in case of dumping exports (Perju, 2009). Increased protection causes both nations' output compositions to move towards their ] position.<ref>{{cite web|url=http://www.investopedia.com/terms/t/trade-war.asp|title=Trade War|author=Investopedia Staff|date=28 September 2009}}</ref> Minor trade disagreements are often called '''trade disputes''' when the war ] is ].


Trade wars could be escalated to full conflict between states as evidenced in the ] after alleged violations of a new treaty. The ] was caused by disputes over trade; the war began with English attacks on Dutch merchant shipping but expanded to vast fleet actions. The ] was for control over the seas and trade routes, where England tried to end the Dutch domination of world trade during a period of intense European commercial rivalry. The ] started over British and Dutch disagreements on the legality and conduct of Dutch trade with Britain's enemies in that war. The ] after unrest over the shogunate's open-door policy to foreign trade. The ] which started after the ] government blockaded its ports, confiscated opium contraband and confined ] traders, resulted in the dispatch of the ] to China and engage the Chinese Navy in the ]. The First Opium War eventually led to the British colony of ], and the ], which arose from another trade war with the same underlying causes, expanded the ] on the island.
Some economists{{Who|date=August 2017}} agree that certain 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 may similarly raise tariffs. An increase in ], however, may be difficult to retaliate against by a foreign country.


==Exploration of an example (1920s)==
Trade wars and protectionism have been implicated by some scholars{{who|date=September 2018}} as the cause of some economic crises, in particular the ].<ref>{{cite book | title=Peddling Protectionism: Smoot-Hawley and the Great Depression | author=Irwin, Douglas | publisher=Princeton University Press | year=2017 | url=https://books.google.com/books?id=oz_BDgAAQBAJ | page=vii-xviii}}</ref> Unlike most other types of conflict, trade wars have a reputation for having only losers and no winners, due to the high cost and lack of benefits for any of the participants.{{cn|date=September 2018}}
One example of a modern tariff war occurred in the 1920s and 1930s between the ] and ], in the ]. The Weimar Republic, led by ] wanted to force Poland, by creating an economic crisis by increasing the tolls for coal and steel products developed there, to give up its territory.{{Citation needed|date=April 2023}} As a reprisal, the Poles increased toll rates for many German products. This led to fast development of the port of ], which was the only way Poland could export its goods to Western Europe without having to transport them through Germany.

In September 1922, the ] (named after ], chair of the ], and ], chair of the ]) was signed by U.S. President ].<ref>Rothgeb, 2001, 30–32</ref> In the end, the tariff law raised the average American ] tariff rate to 38 percent.

Trading partners complained immediately. Those injured by World War I said that, without access by their exports to the American market, they would not be able to make payments to America on war loans. But others saw that this tariff increase would have broader deleterious effects. Democratic Representative ] said, "Our foreign markets depend both on the efficiency of our production and the tariffs of countries in which we would sell. Our own tariffs are an important factor in each. They injure the former and invite the latter."

Five years after the passage of the tariff, American trading partners had raised their own tariffs by a significant degree. ] raised its tariffs on ]s from 45% to 100%, ] raised tariffs on American goods by 40%, and Germany and ] raised tariffs on wheat.<ref>Rothgeb, 2001, 32–33</ref> This customs war is often cited as one of the main causes of the ].

==Dispute settlement mechanisms==
<!--alphabetically-->
*]
*]
**], predecessor of the European Union
**] (post-Brexit)
*]s
**]s
**]
*] (1947–present; modified by WTO formation in 1994–1995)
*], created in the 1990s to avoid customs wars, which are counterproductive in net effect
**] (1990s-present, after decades of efforts to fill the vacuum of the absence of such an institution)
**]
***] of the WTO
**]
*]
*]
*]
*]
*]

==List of trade wars or trade disputes==
<!--chronologically-->

=== Pre-20th century ===
*] (1652–1784)
*] (1839–1860)

=== 20th century ===
*] (1876–1945)
⚫ *] (1898–1934)
⚫ *] (1930), a United States Act implementing protectionist trade policies
⚫ *] (1932–1938)
*] (1960s), U.S. versus European Economic Community

=== 21st century ===
*] (Beef War) (1989–2008)
*] (1995–2000)
*] (1996–1997)
*] (1996–2014)
*] (2002–2014)
*] (2006–2009)
*] (2008–2010)
*] (2009)
*] (2010–2011)
*] (2012)
*] (2012)
*] (2013–present)
*] (2014)
*] (2012–2015)
*] (2018 U.S.-Canada trade dispute)
*] (2019–2023)
*], part of a larger tuna trade war (1970s–present)
*] (1982–present)
*] U.S. versus Vietnam (2001–present)
*], (2017/18–present)
*] (2018–present)


==See also== ==See also==
{{portal|Business and economics}} {{Portal|Business and economics}}
<!--alphabetically-->
⚫ *] (1932–1938)
*]
*] *]
⚫ *]
*] *]
*]
⚫ *], a United States Act implementing protectionist trade policies
*] *]
*] *]
⚫ *]
*]


==References== ==References==
{{reflist|30em}} {{Reflist}}

==Bibliography==
*{{cite book | author=Rothgeb, John | title=U.S. Trade Policy | location=Washington D.C. | publisher=CQ Press | year=2001 | isbn=1-56802-522-X }}
*Smoot-Hawley Tariff Act. (2005). Encyclopædia Britannica. Retrieved October 15, 2005, from
*Perju, Genoveva Elena, Retaliatory Disagreement Point with Asymmetric Countries: Evidence from European Wine Sector During Enlargement (June 15, 2009). Available at SSRN: {{SSRN|1435993}} or <nowiki>http://dx.doi.org/10.2139/ssrn.1435993</nowiki>


{{Authority control}}
==External links==
* at ]


] ]
]
⚫ ]
]

Latest revision as of 23:21, 7 January 2025

Economic conflict using tariffs or other trade barriers For the computer game, see Trade Wars.
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A trade war is an economic conflict often resulting from extreme protectionism in which states raise or create tariffs or other trade barriers against each other in response to trade barriers created by the other party. If tariffs are the exclusive mechanism, then such conflicts are known as customs wars, toll wars, or tariff wars; as a reprisal, the latter state may also increase the tariffs. Trade war arises only if the competitive protection between states is of the same type and it is not valid in case of dumping exports (Perju, 2009). Increased protection causes both nations' output compositions to move towards their autarky position. Minor trade disagreements are often called trade disputes when the war metaphor is hyperbolic.

Trade wars could be escalated to full conflict between states as evidenced in the Massacre of the Bandanese after alleged violations of a new treaty. The First Anglo-Dutch War was caused by disputes over trade; the war began with English attacks on Dutch merchant shipping but expanded to vast fleet actions. The Second Anglo-Dutch War was for control over the seas and trade routes, where England tried to end the Dutch domination of world trade during a period of intense European commercial rivalry. The Fourth Anglo-Dutch War started over British and Dutch disagreements on the legality and conduct of Dutch trade with Britain's enemies in that war. The Shimonoseki Campaign after unrest over the shogunate's open-door policy to foreign trade. The First Opium War which started after the Qing government blockaded its ports, confiscated opium contraband and confined British traders, resulted in the dispatch of the British Navy to China and engage the Chinese Navy in the Battle of Kowloon. The First Opium War eventually led to the British colony of Hong Kong, and the Second Opium War, which arose from another trade war with the same underlying causes, expanded the British possessions on the island.

Exploration of an example (1920s)

One example of a modern tariff war occurred in the 1920s and 1930s between the Weimar Republic and Poland, in the German–Polish customs war. The Weimar Republic, led by Gustav Stresemann wanted to force Poland, by creating an economic crisis by increasing the tolls for coal and steel products developed there, to give up its territory. As a reprisal, the Poles increased toll rates for many German products. This led to fast development of the port of Gdynia, which was the only way Poland could export its goods to Western Europe without having to transport them through Germany.

In September 1922, the Fordney–McCumber Tariff (named after Joseph Fordney, chair of the House Ways and Means Committee, and Porter McCumber, chair of the Senate Finance Committee) was signed by U.S. President Warren G. Harding. In the end, the tariff law raised the average American ad valorem tariff rate to 38 percent.

Trading partners complained immediately. Those injured by World War I said that, without access by their exports to the American market, they would not be able to make payments to America on war loans. But others saw that this tariff increase would have broader deleterious effects. Democratic Representative Cordell Hull said, "Our foreign markets depend both on the efficiency of our production and the tariffs of countries in which we would sell. Our own tariffs are an important factor in each. They injure the former and invite the latter."

Five years after the passage of the tariff, American trading partners had raised their own tariffs by a significant degree. France raised its tariffs on automobiles from 45% to 100%, Spain raised tariffs on American goods by 40%, and Germany and Italy raised tariffs on wheat. This customs war is often cited as one of the main causes of the Great Depression.

Dispute settlement mechanisms

List of trade wars or trade disputes

Pre-20th century

20th century

21st century

See also

References

  1. "What is trade war? definition and meaning". BusinessDictionary.com. Archived from the original on 2018-06-21. Retrieved 2017-08-15.
  2. Investopedia Staff (28 September 2009). "Trade War".
  3. Rothgeb, 2001, 30–32
  4. Rothgeb, 2001, 32–33

Bibliography

  • Rothgeb, John (2001). U.S. Trade Policy. Washington D.C.: CQ Press. ISBN 1-56802-522-X.
  • Smoot-Hawley Tariff Act. (2005). Encyclopædia Britannica. Retrieved October 15, 2005, from Encyclopædia Britannica Online
  • Perju, Genoveva Elena, Retaliatory Disagreement Point with Asymmetric Countries: Evidence from European Wine Sector During Enlargement (June 15, 2009). Available at SSRN: SSRN 1435993 or http://dx.doi.org/10.2139/ssrn.1435993
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