Trade War

A trade war occurs when two or more countries impose tariffs or other trade barriers on each other’s goods and services in response to trade imbalances or economic disputes. Trade wars are often characterized by escalating rounds of tariffs, quotas, or restrictions, negatively affecting global supply chains and increasing the cost of goods for consumers. Trade wars can lead to economic uncertainty, decreased international trade, and strained diplomatic relations.

Example

The U.S.-China trade war, which began in 2018, saw both countries imposing tariffs on billions of dollars' worth of each other’s goods, disrupting global trade and supply chains.