Trade War or Territorial War, 
The Next Global Battle
 

Sachin Verma


 
Copyright 2018 by Sachin Verma

Photo of two containers.


Trade war or territorial war , a next global battle

A Trade war is an economic conflict resulting from extreme protectionism in which imposes tariffs or other trade barriers against each other in response to trade barriers protection causes both nations .

1.Opium War :

The first Trade war was fought between the Qing dynasty of China and the British Empire from 1839to 1842 over ban on trafficking of the substance by the British East India company to China ,This led to China losing Hong Kong to Britain during the second opium war between 1856 -1860 .

Britain along with France forced China to open all of China to foreign Merchants and exempt foreign import duties . Both the wars weakened the China and led to Modernization of China .Both wars were fought for the purpose of business with China because in that time, China Qing adopted protectionism and does not open China for foreign businessmen .

2.The Smoot - Hawley Tariffs Act, 1930 -.

To protect the falling stock market and domestic industry, US president Herbert Hoover signed the Smoot Hawley Tariff Act introduced by Senators Reed Smoot and Hawley , origin to protect the US. Firm sectors , however , president Hoover explained the scope of the Act to include about 20, 000 products from various sectors while the US, successfully reduced its import dependency over the next couple of years , the retaliatory measures from other countries led to 61 percent dip in US exports by 1933. The Trade war only accentuated the great depression . Due to this act , in the United States , the economic crisis happened and the great depression in the United States which result a lot of unemployment and poverty risen and this type of protectionism , not only the United States economy affected but also globally economy affected .although many trade wars happened in the modern history from time to time But these two are the most effective and old trade wars in the modern history.

In the modern time , the means of war is changed because in this time , countries does not attacked on other countries by the Fighter jets or missiles or other means of arms because the United Nations prohibits this but this time , most of the nation used other method such as trade war or diplomatic war .The purpose of all war is to bound the other nation to accept the demand imposed by the other nations .in trade war , nations does not attacked on there countries but they attacked via preventing or prohibiting the companies of other nations to conduct business in his own country and also imposed tariffs, so the domestic companies can compete them .

Like the other wars, in trade war Also no country is a winner ,, all countries are looser because both are affected and in some extent also the global economy affected by this trade wars but these two are the most effective and old trade wars in the modern history

.Now in the present scenario , A new trade wars started by the US President with the China and this trade wars shall be globally affected and not only small countries but also developed and developing countries also affected by this trade wars .Due to this trade , it may be great depression in the global economy .. The Trump tariffs are a series of tariffs imposed during the presidency of Donald Trump as part of his economic policy . In January , 2018 , Trump Imposed tariffs on solar panels and washing machines of 30 to 50 percent . Later the same year he imposed tariffs on steal 25 percent and Aluminium 10 percent from most countries . On June 1, 2018 , this was extend on the EU , Canada and Mexico . Some of few countries exempted the steal and Aluminium tariff. Separately , on July 6 , the Trump administration set a tariff of 25 percent on 818 categories of goods imported from China worth of 50 billion .China accused the US of starting a trade war and on July6 , implemented tariffs equivalent to the $34 billion tariff imposed on it by the U.S . India plans to Recoup trade penalties of $241 million on $1.2 billion worth of Indian steal and Aluminium.

On March 1, 2018 Trump announced his intention to impose a 25% tariff on steal and 10 % tariff on Aluminium imports . In a tweet , the next-day, Trump asserted " Trade war are Good and easy to Win .
The legal basis cited in Trump , tariff order is section 232 of the Trade Expansion Act of 1962 , which under certain circumstances allow the president to Impose tariffs based on the recommendations from the U.S secretary of commerce .

Trump complained of unfair trade practices and imposed 10% tariffs on $200 billion of Chinese imports in September China retaliated by imposing taxes on $60 billion worth of U.S products.

The U.S duties are set to increase to 25% at the starting 2019 . Trump has also threatened to impose duties on $267 billion more of goods if Beijing does not adhere to his demands .this would mean duties in almost all of China's exports to the U.S.

The U.S wants Beijing to cut outside and improve market access to U.S firm's and help to end the Trade gap of $375 billion .
Throughout his Presidential compaign , Donald Trump's America First policy or vision promised a protectionism agenda that would promote the grown of domestic industries.

China and US.are engaged in a full scale Trade war as both sides level treats of new trade tariffs of each other and implement them , the latest round of tit for fat Tariffs by the United States and China has intensified the global debate about whether the world is facing a more trade skirmish or heading rapidly toward a full blown Trade war .The tariffs will Hurt economic growth .and trade tariffs will also hurt the job creation .Global economy is doing well.economies like India and China are doing well .Global economy will not do well if tariffs kick in. Trump administration really wants to change the progress that China is making in made in china 2025 with more advanced goods production of semiconductors .The biggest trade deficit or gap with China and I think , there is an issues with the administration of China that China has used intellectual property over the year for their advantages .In respect of this trade war , the World trade Organization said that the Trump proposed tariffs will lead to "deep recession ".

In the present scenario , The Trump imposes tariffs on chinese goods and also to the other countries goods specially steal and Aluminium . Few countries are exempted from the tariff by US , such as Japan , South Korea and Thailand whereas European union , Brazil ,Canada and Mexico are under the tariff of US. and in response to these tariffs imposed by US ,European union, Canada , China, India and Brazil imposed the same tariffs of the American goods . And due to the tariffs imposed by the US , all countries which has affected by tariffs, under compulsion imposes same percent of tariffs on the American goods because due to imposing tariffs, these countries goods specially steal and aluminium are increased the value of these goods in US market , and so , the aluminium and steal manufactured by the American company are available in a low value or price in the market ,and consumers automatically buy the steal and aluminium manufactured by the American company . So due to tariffs , president Trump promoted American company and give a protection to the American company from foreign company , so that they can compete in the market .

On these countries which has affected by the US tariffs , they also imposes such type of tariffs on American goods , such as China imposes tariffs on American Agriculture products or goods , automobiles etc and European union imposes tariff on the American Jeans , cosmetics , automobile , mobile phone , laptop etc , India also imposes tariff on American Harley Davidson bike, automobile ,Apple I phone , laptop and Boeing company ,airplane . Canada also imposes tariffs on American products for reducing the Trade deficit with United States because due to imposition of tariffs by President Donald Trump , these countries goods will be sell in a few number . ,.

After this , trade deficit increased with United States .And due to imposition of tariffs, the jobs creation shall be affected and many people will be affected by these tariffs , because effected countries company will be stopped gradually because there is no demand in the US. by Imposing tariffs and after this many people lose their jobs and increased the unemployment in the world .and this will be affected globally .in trade war , All country is loser not winner because this is affected globally .

And in Respect US trade wars , If President Trump's thinks that I shall win this trade war , then he thought wrong because after the imposition of tariffs, although he can absolutely successful in promoting it's own or American steal and aluminium companies but Other sectors companies will be affected by the imposition of tariffs by other countries ,which is also affected by the US tariffs , such as due to the tariffs , steal and aluminium companies will be profit while other sectors companies such as automobile , jets ,computer, electronic , mobile companies will be in loss because these companies will be affected by the tariffs of other countries .and the policy of protectionism is against the rule and law of the World trade Organization ..

In this trade war between China and United States , although India also affected by this war in some extent but there is also a big opportunity for India if the United States and China bought Indian products because United States imposed tariffs on Chinese goods and China imposed tariffs on US product , so There is a more possibility to buy the Goods or products which is earlier bought by the United States from China , now US may bought the same goods and products from India and China also bought the agricultural products from the India , which is earlier bought from the United States . So we can say that India is a more possibility in this trade war but if this trade war is continue for a long time , then it also affect the global economy .

Although the US has Trade deficit with China approximately $375 billion dollar .but the Trade war is not a good steps because it's affect globally . The president Donald Trump used another means to reduce the Trade deficit with China .we all of them knows that China stolen the intellectual property of United States and also forced the US companies to transfer technology to the chinese companies. American president Donald Trump learns from the economic depression of America in 1930 by the Smooth Hawley tariffs Act .and in this act also , America adopted the protectionism but United States was most affected by my this act and thereafter, this act was repealed .Due this act , the United States was victims of economic slowdown .

Although the principle of protectionism is right in some extent specially in defence sector because this sector is related to the national security of The country .

Another step taken by the President Donald Trump , it is also affected the global economy .The President Donald Trump imposed sanctions on Iran by withdraw the US from the Iran nuclear Deal 2015 . Although this step or sanctions are criticize by the European union , UK , Germany , France and China and said that all countries will stopped buy the crude oil from Iran before the date of 4 November,2018 .And also all companies which are working with Iran , withdraw the contract otherwise Sanctions will also effective on these companies .

And due to the imposition of sanctions by US, growth of some developing countries will be affected and in the modern time , all countries are related to each other , do therefore this will be affected the global economy .President Donald Trump gave exemption Temporarily India and some other countries from sanctions and these countries can buy the oil from the Iran for few time .

Due to sanctions imposed by the US on Iran, Iran reduced the oil production because there is no demand of Iran oil in the world and Iran can not sell own oil to other nations , other nations are also under threat if they are bought the oil from Iran , then US sanctions will also be imposed and effective .And out of Iran from International oil market , there are more possibility to increase the rate of Crude oil in the international market .and if The crude oil is high, then it's affect the progress of developing countries .

Conclusion:

After the studies and research , we can say that the trade war begins between nations when the trade gap between two or more nations increased or when the domestic companies to protect from the foreign companies so that they can compete them .But this type of protectionism is affected the whole world and global economy . In the aforesaid paragraph we discussed this .so we can say that the trade war is a next global battle .This is my research paper on the trade wars .And this trade can not be challenged on any ground in any court in the world .




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