A trade war is an

economic conflict Economic warfare or economic war is an economic strategy utilized by belligerent nations with the goal of weakening the economy of other states. This is primarily achieved by the use of economic blockades. Ravaging the crops of the enemy is a cl ...

often resulting from extreme

protectionism Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulation ...

in which

state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States * ''Our S ...

s raise or create

tariff A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and p ...

s or other

trade barrier Trade barriers are government-induced restrictions on international trade. According to the theory of comparative advantage, trade barriers are detrimental to the world economy and decrease overall economic efficiency. Most trade barriers work o ...

s against each other in response to trade barriers created by the other party. If tariffs are the exclusive mechanism, then such conflicts are known as customs wars, ''toll wars'', or ''tariff wars''; as a reprisal, the latter state may also increase the tariffs. Trade war arises only if the competitive protection between states is of the same type and it is not valid in case of dumping exports (Perju, 2009). Increased protection causes both nations' output compositions to move towards their

autarky Autarky is the characteristic of self-sufficiency, usually applied to societies, communities, states, and their economic systems. Autarky as an ideal or method has been embraced by a wide range of political ideologies and movements, especiall ...

position. Minor trade disagreements are often called trade disputes when the war

metaphor A metaphor is a figure of speech that, for rhetorical effect, directly refers to one thing by mentioning another. It may provide (or obscure) clarity or identify hidden similarities between two different ideas. Metaphors are often compared wi ...

hyperbolic Hyperbolic is an adjective describing something that resembles or pertains to a hyperbola (a curve), to hyperbole (an overstatement or exaggeration), or to hyperbolic geometry. The following phenomena are described as ''hyperbolic'' because they ...

. Trade wars could be escalated to full conflict between states, as evidenced in the Massacre of the Bandanese after alleged violations of a new treaty. The First Anglo-Dutch War caused by disputes over trade, the war began with English attacks on Dutch merchant shipping, but expanded to vast fleet actions. The

Second Anglo-Dutch War The Second Anglo-Dutch War or the Second Dutch War (4 March 1665 – 31 July 1667; nl, Tweede Engelse Oorlog "Second English War") was a conflict between England and the Dutch Republic partly for control over the seas and trade routes, whe ...

for control over the seas and trade routes, where England tried to end the Dutch domination of world trade during a period of intense European commercial rivalry. The

Fourth Anglo-Dutch War The Fourth Anglo-Dutch War ( nl, Vierde Engels-Nederlandse Oorlog; 1780–1784) was a conflict between the Kingdom of Great Britain and the Dutch Republic. The war, contemporary with the War of American Independence (1775-1783), broke out o ...

over British and Dutch disagreements on the legality and conduct of Dutch trade with Britain's enemies in that war. The

Shimonoseki Campaign The refers to a series of military engagements in 1863 and 1864, fought to control the Shimonoseki Straits of Japan by joint naval forces from Great Britain, France, the Netherlands and the United States, against the Japanese feudal domain of ...

after unrest over the shogunate's open-door policy to foreign trade. The

First Opium War The First Opium War (), also known as the Opium War or the Anglo-Sino War was a series of military engagements fought between Britain and the Qing dynasty of China between 1839 and 1842. The immediate issue was the Chinese enforcement of the ...

which started after the

Qing The Qing dynasty ( ), officially the Great Qing,, was a Manchu-led imperial dynasty of China and the last orthodox dynasty in Chinese history. It emerged from the Later Jin dynasty founded by the Jianzhou Jurchens, a Tungusic-speak ...

government blockaded its ports, confiscated opium contraband and confined British traders, resulted in the dispatch of the

British Navy The Royal Navy (RN) is the United Kingdom's naval warfare force. Although warships were used by English and Scottish kings from the early medieval period, the first major maritime engagements were fought in the Hundred Years' War against Fr ...

to China and engage the Chinese Navy in the

Battle of Kowloon The Battle of Kowloon () was a skirmish between British and Chinese vessels off the Kowloon Peninsula, China, on 4 September 1839, located in Hong Kong, although Kowloon was then part of the Guangdong province. The skirmish was the first armed ...

. The First Opium War eventually led to the British colony of

Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a List of cities in China, city and Special administrative regions of China, special ...

, and the

Second Opium War The Second Opium War (), also known as the Second Anglo-Sino War, the Second China War, the Arrow War, or the Anglo-French expedition to China, was a colonial war lasting from 1856 to 1860, which pitted the British Empire#Britain's imperial ...

, which arose from another trade war with the same underlying causes, expanded the British possessions on the island.

Exploration of an example (1920s)

One example of a modern tariff war occurred in the 1920s and 1930s between the

Weimar Republic The Weimar Republic (german: link=no, Weimarer Republik ), officially named the German Reich, was the government of Germany from 1918 to 1933, during which it was a Constitutional republic, constitutional federal republic for the first time in ...

and

Poland Poland, officially the Republic of Poland, is a country in Central Europe. It is divided into 16 administrative provinces called voivodeships, covering an area of . Poland has a population of over 38 million and is the fifth-most populou ...

, in the German–Polish customs war. The Weimar Republic, led by

Gustav Stresemann Gustav Ernst Stresemann (; 10 May 1878 – 3 October 1929) was a German statesman who served as chancellor in 1923 (for 102 days) and as foreign minister from 1923 to 1929, during the Weimar Republic. His most notable achievement was the reconci ...

wanted to force Poland, by creating an economic crisis by increasing the tolls for coal and steel products developed there, to give up its territory. As a reprisal, the Poles increased toll rates for many German products. This led to fast development of the port of

Gdynia Gdynia ( ; ; german: Gdingen (currently), (1939–1945); csb, Gdiniô, , , ) is a city in northern Poland and a seaport on the Baltic Sea coast. With a population of 243,918, it is the 12th-largest city in Poland and the second-largest in th ...

, which was the only way Poland could export its goods to Western Europe without having to transport them through Germany. In September 1922, the

Fordney–McCumber Tariff The Fordney–McCumber Tariff of 1922 was a law that raised American tariffs on many imported goods to protect factories and farms. The US Congress displayed a pro-business attitude in passing the tariff and in promoting foreign trade by providin ...

(named after

Joseph Fordney Joseph Warren Fordney (November 5, 1853 – January 8, 1932) was an American Republican politician from Saginaw, Michigan. He represented Saginaw County and the surrounding area of Central Michigan in the U.S. House of Representatives for twent ...

, chair of the

House Ways and Means Committee The Committee on Ways and Means is the chief tax-writing committee of the United States House of Representatives. The committee has jurisdiction over all taxation, tariffs, and other revenue-raising measures, as well as a number of other progra ...

, and

Porter McCumber Porter James McCumber (February 3, 1858May 18, 1933) was a United States senator from North Dakota. He was a supporter of the 1906 "Pure Food and Drug Act", and of the League of Nations. Early life Born in Crete, Illinois in 1858, he moved wit ...

, chair of the

Senate Finance Committee The United States Senate Committee on Finance (or, less formally, Senate Finance Committee) is a standing committee of the United States Senate. The Committee concerns itself with matters relating to taxation and other revenue measures general ...

) was signed by U.S. President Warren G. Harding. In the end, the tariff law raised the average American

ad valorem An ''ad valorem'' tax (Latin for "according to value") is a tax whose amount is based on the value of a transaction or of property. It is typically imposed at the time of a transaction, as in the case of a sales tax or value-added tax (VAT). An ...

tariff rate to 38 percent. Trading partners complained immediately. Those injured by World War I said that, without access by their exports to the American market, they would not be able to make payments to America on war loans. But others saw that this tariff increase would have broader deleterious effects. Democratic Representative

Cordell Hull Cordell Hull (October 2, 1871July 23, 1955) was an American politician from Tennessee and the longest-serving U.S. Secretary of State, holding the position for 11 years (1933–1944) in the administration of President Franklin Delano Roosevelt ...

said, "Our foreign markets depend both on the efficiency of our production and the tariffs of countries in which we would sell. Our own ightariffs are an important factor in each. They injure the former and invite the latter." Five years after the passage of the tariff, American trading partners had raised their own tariffs by a significant degree.

France France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of Overseas France, overseas regions and territories in the Americas and the Atlantic Ocean, Atlantic, Pacific Ocean, Pac ...

raised its tariffs on

automobile A car or automobile is a motor vehicle with wheels. Most definitions of ''cars'' say that they run primarily on roads, seat one to eight people, have four wheels, and mainly transport people instead of goods. The year 1886 is regarded ...

s from 45% to 100%,

Spain , image_flag = Bandera de España.svg , image_coat = Escudo de España (mazonado).svg , national_motto = '' Plus ultra'' (Latin)(English: "Further Beyond") , national_anthem = (English: "Royal March") , ...

raised tariffs on American goods by 40%, and Germany and

Italy Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical ...

raised tariffs on wheat.Rothgeb, 2001, 32-33 This customs war is often cited as one of the main causes of the

Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...

Dispute settlement mechanisms

* Compromis *

Economic integration Economic integration is the unification of economic policies between different states, through the partial or full abolition of tariff and non-tariff restrictions on trade. The trade-stimulation effects intended by means of economic integrati ...

European Economic Community The European Economic Community (EEC) was a regional organization created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lis ...

, predecessor of the European Union **

EU–UK Trade and Cooperation Agreement The EU–UK Trade and Cooperation Agreement (TCA) is a free trade agreement signed on 30 December 2020, between the European Union (EU), the European Atomic Energy Community (Euratom), and the United Kingdom (UK). It provisionally applied fro ...

(post-Brexit) *

Free trade agreement A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occ ...

s **

Free-trade area A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and ...

s **

List of multilateral free-trade agreements This is a list of multilateral free-trade agreements, between several countries all treated equally. For agreements between two countries, between a bloc and a country, or between two blocs, see list of bilateral free-trade agreements; these ar ...

* GATT (General Agreement on Tariffs and Trade) (1947-present; modified by WTO formation in 1994-1995) *

World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation in the United Nations System, governments use the organization to establish, revise, and ...

, created in the 1990s to avoid customs wars, which are counterproductive in net effect ** History of the World Trade Organization (1990s-present, after decades of efforts to fill the vacuum of the absence of such an institution) ** Dispute settlement in the World Trade Organization ***

Dispute Settlement Body The Dispute Settlement Body (DSB) of the World Trade Organization (WTO) makes decisions on trade disputes between governments that are adjudicated by the Organization. Its decisions generally match those of the Dispute Panel. Institutional stru ...

of the WTO ** List of WTO dispute settlement cases *

International Centre for Settlement of Investment Disputes The International Centre for Settlement of Investment Disputes (ICSID) is an international arbitration institution established in 1966 for legal dispute resolution and conciliation between international investors and States. ICSID is part of ...

* Investor-state dispute settlement * Trade and Investment Framework Agreement *

TRIPS Agreement The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal agreement between all the member nations of the World Trade Organization (WTO). It establishes minimum standards for the regulation by nat ...

* United Nations Commission on International Trade Law

List of trade wars or trade disputes

Pre-20th century

Anglo-Dutch Wars The Anglo–Dutch Wars ( nl, Engels–Nederlandse Oorlogen) were a series of conflicts mainly fought between the Dutch Republic and England (later Great Britain) from mid-17th to late 18th century. The first three wars occurred in the second ...

(1652–1784) *

Opium Wars The Opium Wars () were two conflicts waged between China and Western powers during the mid-19th century. The First Opium War was fought from 1839 to 1842 between China and the United Kingdom, and was triggered by the Chinese government's ...

(1839–1860)

20th century

Japan–Korea disputes Korea and Japan had a long history between each other as immediate neighbors and at the start of the 20th century Korea was ruled by the Imperial Japanese government starting with the Japan–Korea Treaty of 1910. South Korea and North Korea ...

(1876-1945) *

Banana Wars The Banana Wars were a series of conflicts that consisted of military occupation, police action, and intervention by the United States in Central America and the Caribbean between the end of the Spanish–American War in 1898 and the inceptio ...

(1898–1934) *

Smoot–Hawley Tariff Act The Tariff Act of 1930 (codified at ), commonly known as the Smoot–Hawley Tariff or Hawley–Smoot Tariff, was a law that implemented protectionist trade policies in the United States. Sponsored by Senator Reed Smoot and Representative Willi ...

(1930), a United States Act implementing protectionist trade policies *

Anglo-Irish trade war The Anglo-Irish Trade War (also called the Economic War) was a retaliatory trade war between the Irish Free State and the United Kingdom from 1932 to 1938. The Irish government refused to continue reimbursing Britain with land annuities from fi ...

(1932–1938) *

Chicken War Chicken War or Hen War ( pl, Wojna kokosza) is the colloquial name for a 1537 anti-royalist and anti- absolutist ''rokosz'' (rebellion) by the Polish nobility. The derisive name was coined by the ''magnates'', who for the most part supported the ...

(1960s), U.S. versus European Economic Community

21st century

* Beef hormone controversy (Beef War) (1989-2008) * Canada–Australia salmon trade dispute (1995-2000) * Japanese Sound Recording Trade Disputes (1996–1997) * Broomcorn brooms dispute (1996-2014) * Brazil–United States cotton dispute (2002-2014) *

US Mexico Trade Dispute - Stainless Steel Sheets and Coils dumping The US-Mexico Trade Dispute - Stainless Steel Sheets and Coils dumping is a trade dispute between the governments of The United States and Mexico. On May 26, 2006 Mexico requested consultations with the United States about a number of final anti-dum ...

(2006-2009) *

EC-IT product dispute European communities and its member states — tariff treatment of certain information technology products or for short EC - IT Product Dispute (DS376) is a WTO dispute initiated by Japan with European Communities and its member states as responde ...

(2008-2010) *

Milk War The Milk War was a trade conflict between Russia and Belarus in June 2009. Russia and Belarus have close relations and the conflict stemmed from Russia allegedly attempting to pay Belarus US$500 million to recognize the independence o ...

(2009) * Trade war over genetically modified food (2010–2011) * South Africa–Brazil Frozen Chicken Trade Dispute (2012) *

Argentina–United States lemon dispute The Argentina–United States lemon dispute was a World Trade Organization dispute settlement case (DS448) challenging U.S. import laws. On September 3, 2012, Argentina requested the assistance of the World Trade Organization in hosting consultation ...

(2012) * Mexico–United States sugarcane trade dispute (2014) * Rare earths trade dispute (2012-2015) * Trump tariffs (2018 U.S.-Canada trade dispute) *

Tuna-Dolphin GATT Case (I and II) Since 1970s, there has been on going trade disputes between Mexico (and other tuna exporters) against the United States. The complaints were taken to General Agreement on Tariffs and Trade (GATT) committee and its 1995 successor; the World Trade O ...

, part of a larger tuna trade war (1970s-present) *

Canada–United States softwood lumber dispute The Canada–U.S. softwood lumber dispute is one of the largest and most enduring trade disputes between both nations. This conflict arose in 1982 and its effects are still seen today. British Columbia, the major Canadian exporter of softwood ...

(1982-present) *

Catfish Dispute The Catfish Dispute started in 2001, as a trade war between Vietnam and the United States' catfish producers. The main argument concerns the import volume of catfish from Vietnam which results in lower profits for U.S. catfish producers. In deal ...

, U.S. versus Vietnam (2001-present) *

China–United States trade war The China–United States trade war () is an ongoing economic conflict between the People's Republic of China and the United States of America. In January 2018, U.S. President Donald Trump began setting tariffs and other trade barriers on ...

(2018–present) * Japan–South Korea trade dispute (2019–present)

References

Bibliography

* *Smoot-Hawley Tariff Act. (2005). Encyclopædia Britannica. Retrieved October 15, 2005, fro
Encyclopædia Britannica Online
*Perju, Genoveva Elena, Retaliatory Disagreement Point with Asymmetric Countries: Evidence from European Wine Sector During Enlargement (June 15, 2009). Available at SSRN: https://ssrn.com/abstract=1435993 or http://dx.doi.org/10.2139/ssrn.1435993 {{Authority control Economic warfare Customs duties Metaphors referring to war and violence