A trade war can cause various damages, both economically and socially, including rising prices for consumers, reduced trade and investment, and possible recessions in the involved economies.
Economic damages:
Price increase:
Tariffs increase the cost of imports, which translates to higher prices for consumers and for businesses that use those goods in their production.
Reduced trade and investment:
The uncertainty and higher costs associated with tariffs can reduce international trade and foreign direct investment.
Disruption of supply chains:
Tariffs can affect the global interconnection of supply chains, which can cause problems in the production and distribution of goods.
Possible recessions:
In extreme cases, a trade war can lead to a slowdown in economic growth or even recessions in some countries.
Impact on a country's economy:
Tariffs can directly affect a country's economy, especially if it is dependent on exports.
Social damages:
Job loss:
The reduction of trade and investment can lead to job losses, especially in sectors that depend on exports or international supply chains.
Lower consumer welfare:
Higher prices and reduced availability of goods and services can affect consumer welfare.
Inequality:
The trade war can increase inequality, as the wealthier may be better protected from the negative effects than the poorer.
Examples of concrete damages:
In the case of the trade war between the United States and China, there has been a reduction in global economic growth, a decline in financial markets, and an increase in inflation in some countries.
The imposition of tariffs on agricultural products has made these products more expensive for American consumers.
Companies that rely on imports from China have seen their costs increase, which has affected their competitiveness.
In summary, a trade war can have very serious consequences for the economy and society, both nationally and globally.
