Trade Wars: Factors and Objectives

Topic: Trading
Words: 522 Pages: 2

Trade wars

The emergence of a free market, capitalism, and explicit competition has led to the global phenomenon of trade wars. This presentation will focus on the concept of protectionism as the leading cause of international tension and trade wars. The advantages, disadvantages, and implications of protectionism will be analyzed.

Protectionism: pros

The primary goal of any protectionist policy is to ensure domestic economic growth and a secure marketplace for the community. Hence, the first benefit of protectionism is the prevention of unfair competition. Thus, for example, when the US realized that China’s unfair trade policies made it impossible to compete with the state’s prices, the American government decided to increase its tariffs (Kapustina et al., 2020). The second advantage is the increased demand for domestic goods. For example, Argentina’s tariffs on imported food draw attention to the local produce and its potential for the economy. The third positive aspect of protectionism is the promotion of local labor. For instance, the ratification of the EU’s Common Agricultural Policy was made in the best interest of local farmers at the risk of unemployment.

The fourth benefit of protectionism is the trade deficit improvement. For example, if the country imports raw goods, it can lose money on the production of processed foods and import them for a higher price. Thus, the EU’s tariffs on processed food imports aim at encouraging the trade deficit and development of local industries. Finally, protectionism allows countries to avoid unethical trade policies. For example, during the EU-US Banana Wars in the 1990s, the US filed a lawsuit claiming that the EU was utilizing unfair trade policies in terms of banana import from Cambodia, securing its domestic market and import prices.

Protectionism: cons

On the other hand, protectionism is a risky endeavor that leads to higher tension in the global market and barriers to local development through cultural exchange. For example, Trump Administration’s tariffs on China imports, while having some benefits, increase local costs and make the customers pay the difference. The recent sanctions on Russian imports and export have resulted in two significant drawbacks for the country. Firstly, Russians are now isolated in terms of the marketplace, so they have no access to some vital items like pads and medications. Secondly, the sanctions bring disastrous effects on the state’s economic growth. The other disadvantages include trade discouragement and poor diplomatic relations. Although applicable to Russia, the examples of these cons include the high import tariffs for Bermuda that discourage local export manufacturing and China’s isolationist stance on global trade and importing goods to the population.


Considering the facts above, it may be concluded that protectionism plays a vital role in the emergence of international trade wars. Hence, while isolationist economic patterns contribute to the boost of the domestic economy, one should ponder the true intention behind protectionism. For example, in the example of the US-China trade war paradigm, the focus is on impeding the opponent’s growth rather than promoting local development (Boylan et al., 2021). For this reason, it is of paramount importance to continue pursuing functional international relations to improve the economy through competition rather than isolation.


Boylan, B. M., McBeath, J., & Wang, B. (2021). US–China relations: Nationalism, the trade war, and COVID-19. Fudan Journal of the Humanities and Social Sciences, 14(1), 23-40. Web.

Kapustina, L., Lipková, Ľ., Silin, Y., & Drevalev, A. (2020). US-China trade war: Causes and outcomes. In SHS Web of Conferences (Vol. 73, p. 1-13). EDP Sciences. Web.

Pettinger, T. (2021). Examples and types of protectionism. Economics Help. Web.

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