Trade war

From open-encyclopedia.com - the free encyclopedia.

A trade war refers to two or more nations raising or creating tariffs or other trade barriers on each other in retaliation for other trade barriers. It is the opposite of free trade.

Economists generally believe trade wars are very non-productive and decrease the economic welfare and total social surplus of all nations involved. However, political scientists may see the threat of a trade war as helpful in winning a concession of some sort from the other side..