The Good and Bad of Trade Wars on the Economy
The world of global trade is currently in a worrying phase. How could it not be, Trump's tariff policy steps that have been launched have caused chaos in exports and imports in almost most countries in the world. So why did Trump have to set tariffs that have created chaos in the world of trade? The reason is none other than to protect US domestic products and the economy. However, it is clear that countries affected by tariffs will definitely retaliate against America so that this creates something called a "trade war"
Efforts to protect domestic industries themselves usually arise due to unfair competition with foreign industries. In order to maintain and strengthen domestic industries, a country will reduce imports and increase exports by implementing tariffs or import quotas.
The trade war itself will ultimately create positive and negative things for the economy along the way. Let's look at the positive and negative sides. The positive impacts are:
Some of the positive impacts of the trade war are:
1. Protecting domestic companies from unfair competition.
2. Increasing demand for local goods.
3. Encourage local job growth.
4. Fix the trade deficit.
5. Sanction countries with unethical trade policies.
6. Can cause mass layoffs in labor-intensive and manufacturing sectors.
Meanwhile, the negative impacts of the trade war are:
1. Increase costs (production costs).
2. Trigger inflation.
3. Reduce the choice of goods in the market.
4. Slow economic growth.
5. Damage diplomatic relations and cultural exchange.
6. Hinder trade.
So the point is what Trump did has a big effect on the world of trade and has good and bad in its implementation which will later depend on the policies of the countries facing it.
Source: (mrv@Newsmaker)
