Trade war

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A trade war refers to two or more states raising or creating tariffs or other trade barriers on each other in retaliation for other trade barriers.[1] Increased protection causes both nations' output compositions to move towards their autarky position.[2]

Some economists[who?] 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 subsidies, however, may be difficult to retaliate against by a foreign country. Many poor countries do not have the ability to raise subsidies. In addition, poor countries are more vulnerable than rich countries in trade wars; in raising protections against dumping of cheap products, a government risks making the product too expensive for its people to afford.[citation needed]

See also[edit]


  1. ^ "What is trade war? definition and meaning". Retrieved 2017-08-15. 
  2. ^ Trade War

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