When one nation retaliates against another by raising import taxes or imposing other limitations on the latter’s imports, it is known as a trade war . It is an economic war that arises as a result of excessive protectionism, in which governments raise or impose tariffs or other trade barriers against one another.
In general, a country will pursue protectionist measures to protect native firms and products, as well as its employment, against foreign competition. Protectionism is a strategy for reducing trade imbalances. Tariffs, import quotas, domestic subsidies, currency devaluation, and embargos are all examples of trade obstacles employed in trade wars. When a country’s imports outnumber its exports, it has a trade imbalance. That’s what’s happening with the US for quite a while. There’s a significant trade imbalance, where US manufactured products are less exported (less bought) than those the US imported.
Trade restrictions can safeguard US sectors in the short run. However, in the long run, they are typically detrimental to the economy (any economy) as a whole. A tariff is a levy or fee levied on products entering a country. A trade war in a global economy may be highly destructive to both end consumers and businesses, and the contagion can spread to impact many economics areas.
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