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Trade and War

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Trade and War did not co-exist historically because trading as an activity was an indicator of peace between the states. Nevertheless, Trade has caused many conflicts between nations and has been at the root of many conflicts in the past. Some of the famous wars in History whose cause can be traced to trade are the early colonial periods between the English and the Dutch over the possession of colonies across Asia and the New World, which were known as the Anglo-Dutch Wars. The Opium wars fought between British Empire and Imperial China in the mid-19th century can also be attributed to the trading policies of the British. The great Mongol invasions during the 12th also has a trade angle to it as the Mongols tried to revive the ancient Silk Route.

At Present, the term ‘Trade War’ is in the Global Headlines due to ongoing Tussle over the Tariff Pricing issue between the present global economic giants the U.S and China. South Korea and Japan are slugging out their differences in the matters of trade. The present situation between the U.S and China has its origin in the Tariffs imposed by Chinese on U.S produced goods and vice-versa. The current President of U.S, Donald Trump who won the presidential elections in 2016 on the back of promise that he’ll bring back the jobs outsourced from the U.S Industries, has decidedly targeted the issue of Chinese trade balance with the U.S. He believes that the trade agreements between China and U.S to be unjust to U.S allowing China to prosper at the expense of the U.S. Hence in the month of March,2018, He directed US Trade representative to list and impose tariffs on Chinese goods in the U.S market. Chinese responded within two weeks by imposing tariffs on U.S goods in the Chinese market. This development has negative consequences on the Globalisation.

For the Chinese, this has impacted them significantly as their recent economic growth was highly dependent on the exports. The present hostilities have resulted in escalation of protectionist trade policies by both parties with less signs of abating the conflict. The Supply chain of various multinational companies are suffering from the reckless measures enacted by their governments.

Though this has caused the Global economy to be more volatile, it has benefitted several developing nations in Asia and elsewhere with significant populations to take over Chinese manufacturing. Case in point is Bangladesh, where the Chinese have started to invest in their Industries and providing jobs to their largely impoverished population. This is mainly to circumvent U.S policies on Chinese goods by producing them on a neutral soil and later exporting it to the U.S and European markets. Vietnam and Philippines have also had foreign investments on their soil for the same and have experienced success in turning over the businesses of the large corporations. In an increasingly Globalised world Trade Wars can be sometimes seen as a Zero-Sum game where some countries gain at the expense of other nation’s misfortunes. This could also make large economies like U.S, China, India move towards Autarky and impacting negatively on the Global trade scenario.



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