Trade Wars: The High-Stakes Game of Economic Chicken | Golden Age

Trade wars have been a persistent feature of the global economy, with the US-China trade war being a prime example, involving over $500 billion in tariffs and affecting millions of jobs. The 2018 trade war between the US and China, sparked by President Donald Trump's tariffs on Chinese goods, has had far-reaching consequences, including a 2.5% decline in Chinese exports to the US. Historically, trade wars have been used as a tool of economic coercion, with the 1930 Smoot-Hawley Tariff Act being a notable example, which exacerbated the Great Depression. The impact of trade wars can be felt across various sectors, from agriculture to technology, with companies like Apple and Boeing being affected. As the global economy becomes increasingly interconnected, the stakes of trade wars will only continue to rise, with some estimates suggesting that a full-blown trade war could reduce global GDP by up to 2%. The future of trade wars will likely be shaped by the evolving relationships between major economic powers, including the US, China, and the EU, with the World Trade Organization (WTO) playing a crucial role in regulating international trade.