Trade War

Definition

A trade war is an economic conflict in which countries impose tariffs, quotas, or other trade barriers against each other in an escalating cycle of retaliation. Trade wars typically begin when one nation enacts protectionist measures to shield domestic industries, provoking retaliatory measures from trading partners. The consequences include higher consumer prices, disrupted supply chains, reduced export markets, and slower global economic growth. Modern trade wars can involve technology restrictions, export controls on critical inputs, and weaponization of investment screening. The US-China trade war that began in 2018 is a prominent contemporary example.