Trade War: A Quick Tutorial to Understand It

articlemostwanted - In recent months, the United States has implemented new tariffs on imported goods, reigniting discussions around trade wars. Furthermore, decisions like the already happened ban on TikTok (though it has been lifted after Trump’s coronation) have sparked debates about whether such measures are part of a broader economic conflict. Individuals like us who are not familiar with economic-thingy might be wondering what is going on, is there really a trade war? Or is it just an exaggeration? More importantly, will our daily life be affected?

To put it simply, a trade war happens when nations place limitations on one another's goods and services, like tariffs or prohibitions, in an effort to address perceived imbalances or secure an economic gain. Although these conflicts frequently begin as policy conflicts, they can have repercussions that impact both individuals and businesses in a variety of sectors, economies, and even day-to-day life.

If you still struggle to comprehend that, i have provided you with a sot of daily life example:

Trump’s family loved their daily sandwiches, made with Jinping’s fresh bakery bread and peanut butter from a local store. Wanting to protect his own backyard bakery, Trump imposed a fee on Jinping’s bread, making it more expensive.

Jinping then raised the price of peanut butter as a retaliation, knowing Trump’s family was dependent on it. As the fees stocked up, Trump’s family was trying hard to afford their usual accommodations, forced to settle for lower-quality substitutes. Meanwhile, Jinping found new buyers and didn’t even feel the impact.

We have various wars, ranging from real war where people shed blood just like what happened with Ukraine and Russia right now, ideology war between communism and democracy during the cold war of Uni Soviet and USA, and even proxy war where big players ignite conflict in smaller regions. Trade war is one of them, and often happens easier because it doesn’t directly cause destruction.

While it is true that immediate impact is barely to occur, the domino effects might be greater than real war itself. A battlefield war only happens outside of civilian areas with minor infrastructure damage (if the war abides to geneva convention), while a trade war hits the chain of supply and resources of a country, which civilians are highly dependent on. To be more precise, here are the effect of trade wars that will mostly happen:

1. Increased Prices for Consumers
   Import taxes often end up in increased prices for everyday items since companies pass the extra expense on to customers.
2. Job Losses in Export-Dependent Industries
   Industries reliant on exports may suffer due to retaliatory tariffs from other countries, leading to layoffs and economic instability.
3. Disruption of Supply Chains
   Trade wars can disrupt global supply chains, causing shortages of goods and delays in production, which later will damage companies and people.
4. Reduced Economic Growth
   The uncertainty and reduced trade volumes caused by trade wars can jam economic growth, reducing wages and lesser job vacancy (since no one can pay the labor).
5. Limited Consumer Choices
   Protectionist policies and tariffs can reduce the availability of foreign goods, limiting product variation for consumers and potentially lowering the quality of available products.

In the worst scenario, if the government can’t handle it well, mass unemployment is what will be surging next, resulting in a high rate of crime, lower security, and eventually leading to riots and rebellion from the people. Destruction from inside, like a certain war strategist said, creates greater damage than frontal confrontation.

Sun Tzu "The supreme art of war is to subdue the enemy without fighting".