Trade Wars

Nov 2018

If there’s a trade war (where countries erect barriers to imports, trying to help domestic producers), it would be a negative for the U.S. and probably a bigger negative for countries such as China, Japan and much of Europe. For countries— as opposed to specific interest groups—trade wars ultimately hurt economic growth. For this reason, trade wars are rare and typically brief. It is theoreti­cally possible for a limited trade war to help break down barriers to truly free trade. Importantly, free trade needs to be practiced by all parties if its full benefits are going to be realized.