According to President Trump, "Canada charges the U.S. a 270% tariff on Dairy Products! They didn’t tell you that, did they? Not fair to our farmers"!
Posted 12 days ago in International, updated 5 days ago.
In this article, we will define the terms trade wars and explore the early warning signs, its root causes, the complications associated with such actions, and take a deeper look into the benefiting factors along with who gets hurt the most in the trade war food chain.
A trade war is an economic conflict in which states raise or create trade barriers against each other in response to trade barriers created by the other party. Certain economic protections are more costly than others which may be more likely to trigger an actual 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 or financial support. In addition, poor countries are more vulnerable than rich countries in trade wars. In an attempt against the dumping of cheap products, a government risks making the product too expensive for its people. In extreme cases, a trade war in combination with protectionism can create complications and give rise to circumstances similar to the Great Depression.
The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. According to popular belief, The Great Depression started in the United States after a major fall in stock prices. Unemployment in the U.S. rose to 25% and in some countries rose as high as 33%. Some of the early warning signs of a trade war would be one nation's protectionist attitude towards another less favorable nation. By creating Tariffs on your products it makes it less desirable, affordable and decreases. This can be considered to be a protectionist approach unless we actually needed the steel and aluminum for some major infrastructure upgrades and repairs, as promised during his campaign for the presidency but this is clearly not the case. According to his twitter posts, the ideology behind the Tariffs lies with what he sees as economic inequality and is meant to bring our leaders to the table to negotiate.
Germany is a nation which can be considered to be Europe's biggest economy and a global export power. They recently showed a quarter on quarter growth of just 0.3% in the first three months of the year. That's half the rate it achieved in the previous quarter. Trade powers the German economy, with exports accounting for roughly 50% of their GDP. The country has a huge trade surplus with the rest of the world, which has long been a source of irritation for President Donald Trump. He has recently threatened tariffs on German cars. But threats alone appear enough to have had a negative impact on Germany's growth, as businesses postponed investment decisions and factory output dropped until the end of June, which is the deadline for the decisions on implementing tariffs. German exporters have also been hit by a rise in the euro, which makes their products more expensive in overseas markets. The benefitting factors of a trade war lie within the winner's circle and the losers. Everyone loses in the beginning stages. Nations will definitely have to readjust which can take a considerable amount of time. It can definitely isolate the world into different regions which will affect consumers in our every day lives. Rappers will no longer be able to rap about driving foreign cars, travel restrictions may be implemented so as to protect citizens and worse case scenarios it can open the stage for war. If we look at Adolf Hitler's war model, he easily blamed an entire religious group for the economic woes for his nation and used it to fuel the fire during the war. Consider this. A nation goes into an economic depression, it's leaders blame their economic woes on an entire nation, and hostilities increase. This can very much be easily accomplished in the digital age with social media playing a major role. The World Trade Organization warned last month that tariffs and other trade restrictions would inflict serious damage on the global economy. It urged Trump and other world leaders to "show restraint."
Here is President Trump's take on his steel & aluminum tariffs imposed on our allies.fs
Canada charges the U.S. a 270% tariff on Dairy Products! They didn’t tell you that, did they? Not fair to our farmers!— Donald J. Trump (@realDonaldTrump) June 8, 2018