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{{Short description|Economic conflict using tariffs or other trade barriers}}
{{Trade bloc}}

A '''trade war''' is an economic conflict often resulting from extreme [[Finance:Protectionism|protectionism]] in which [[Earth:Sovereign state|state]]s raise or create [[Finance:Tariff|tariff]]s or other [[Finance:Trade barrier|trade barrier]]s against each other in response to trade barriers created by the other party.<ref>{{Cite web|url=http://www.businessdictionary.com/definition/trade-war.html|title=What is trade war? definition and meaning|website=BusinessDictionary.com|language=en|access-date=2017-08-15|archive-date=2018-06-21|archive-url=https://web.archive.org/web/20180621043058/http://www.businessdictionary.com/definition/trade-war.html|url-status=dead}}</ref> If tariffs are the exclusive mechanism, then such conflicts are known as  '''customs wars''', ''toll wars'', or ''tariff wars''; as a reprisal, the latter state may also increase the tariffs. Trade war arises only if the competitive protection between states is of the same type and it is not valid in case of dumping exports (Perju, 2009). Increased protection causes both nations' output compositions to move towards their [[Philosophy:Autarky|autarky]] position.<ref>{{cite web|url=http://www.investopedia.com/terms/t/trade-war.asp|title=Trade War|first=Investopedia|last=Staff|date=28 September 2009}}</ref> Minor trade disagreements are often called '''trade disputes''' when the war metaphor is hyperbolic. 

Trade wars could be escalated to full conflict between states as evidenced in the Massacre of the Bandanese after alleged violations of a new treaty. The First Anglo-Dutch War was caused by disputes over trade; the war began with English attacks on Dutch merchant shipping but expanded to vast fleet actions. The Second Anglo-Dutch War was for control over the seas and trade routes, where England tried to end the Dutch domination of world trade during a period of intense European commercial rivalry. The Fourth Anglo-Dutch War started over British and Dutch disagreements on the legality and conduct of Dutch trade with Britain's enemies in that war. The Shimonoseki Campaign after unrest over the shogunate's open-door policy to foreign trade. The First Opium War which started after the Qing government blockaded its ports, confiscated opium contraband and confined [[Place:British Empire|British]] traders, resulted in the dispatch of the British Navy to China and engage the Chinese Navy in the Battle of Kowloon. The First Opium War eventually led to the British colony of Hong Kong, and the Second Opium War, which arose from another trade war with the same underlying causes, expanded the British possessions on the island.

==Exploration of an example (1920s)==
One example of a modern tariff war occurred in the 1920s and 1930s between the Weimar Republic and [[Place:Second Polish Republic|Poland]], in the German–Polish customs war. The Weimar Republic, led by [[Biography:Gustav Stresemann|Gustav Stresemann]] wanted to force Poland, by creating an economic crisis by increasing the tolls for coal and steel products developed there, to give up its territory.{{Citation needed|date=April 2023}} As a reprisal, the Poles increased toll rates for many German products. This led to fast development of the port of [[Place:Gdynia|Gdynia]], which was the only way Poland could export its goods to Western Europe without having to transport them through Germany.

In September 1922, the Fordney–McCumber Tariff (named after Joseph Fordney, chair of the House Ways and Means Committee, and Porter McCumber, chair of the Senate Finance Committee) was signed by U.S. President Warren G. Harding.<ref>Rothgeb, 2001, 30–32</ref>  In the end, the tariff law raised the average American ad valorem tariff rate to 38 percent.

Trading partners complained immediately.  Those injured by World War I said that, without access by their exports to the American market, they would not be able to make payments to America on war loans.  But others saw that this tariff increase would have broader deleterious effects.  Democratic Representative [[Biography:Cordell Hull|Cordell Hull]] said, "Our foreign markets depend both on the efficiency of our production and the tariffs of countries in which we would sell.  Our own [high] tariffs are an important factor in each.  They injure the former and invite the latter."

Five years after the passage of the tariff, American trading partners had raised their own tariffs by a significant degree.  {{wipe|France}} raised its tariffs on automobiles from 45% to 100%, {{wipe|Spain}} raised tariffs on American goods by 40%, and Germany and [[History:Kingdom of Italy|Italy]] raised tariffs on wheat.<ref>Rothgeb, 2001, 32–33</ref> This customs war is often cited as one of the main causes of the [[Finance:Great Depression|Great Depression]].

==Dispute settlement mechanisms==
<!--alphabetically-->
*[[Social:Compromis|Compromis]]
*[[Finance:Economic integration|Economic integration]]
**European Economic Community, predecessor of the European Union
**EU–UK Trade and Cooperation Agreement (post-Brexit)
*[[Finance:Free trade agreement|Free trade agreement]]s
**[[Finance:Free-trade area|Free-trade area]]s
**[[Finance:List of multilateral free-trade agreements|List of multilateral free-trade agreements]]
*[[Finance:General Agreement on Tariffs and Trade|GATT (General Agreement on Tariffs and Trade)]] (1947–present; modified by WTO formation in 1994–1995)
*[[Organization:World Trade Organization|World Trade Organization]], created in the 1990s to avoid customs wars, which are counterproductive in net effect
**History of the World Trade Organization (1990s-present, after decades of efforts to fill the vacuum of the absence of such an institution)
**[[Organization:Dispute settlement in the World Trade Organization|Dispute settlement in the World Trade Organization]]
***[[Social:Dispute Settlement Body|Dispute Settlement Body]] of the WTO 
**List of WTO dispute settlement cases
*[[Organization:International Centre for Settlement of Investment Disputes|International Centre for Settlement of Investment Disputes]]
*[[Social:Investor-state dispute settlement|Investor-state dispute settlement]]
*[[Organization:Trade and Investment Framework Agreement|Trade and Investment Framework Agreement]]
*[[Finance:TRIPS Agreement|TRIPS Agreement]]
*[[Organization:United Nations Commission on International Trade Law|United Nations Commission on International Trade Law]]

==List of trade wars or trade disputes==
<!--chronologically-->
=== Pre-20th century ===
*Anglo-Dutch Wars (1652–1784)
*Opium Wars (1839–1860)

=== 20th century ===
*Japan–Korea disputes (1876–1945)
*Banana Wars (1898–1934)
*Smoot–Hawley Tariff Act (1930), a United States Act implementing protectionist trade policies
*Anglo-Irish trade war (1932–1938)
*Chicken War (1960s), U.S. versus European Economic Community

=== 21st century ===
*Beef hormone controversy (Beef War) (1989–2008)
*Canada–Australia salmon trade dispute (1995–2000)
*Japanese Sound Recording Trade Disputes (1996–1997)
*Broomcorn brooms dispute (1996–2014)
*Brazil–United States cotton dispute (2002–2014)
*US Mexico Trade Dispute - Stainless Steel Sheets and Coils dumping (2006–2009)
*EC-IT product dispute (2008–2010)
*Milk War (2009)
*Trade war over genetically modified food (2010–2011)
*South Africa–Brazil Frozen Chicken Trade Dispute (2012)
*Argentina–United States lemon dispute (2012)
*Russian embargo of Ukrainian goods (2013-present)
*Mexico–United States sugarcane trade dispute (2014)
*Rare earths trade dispute (2012–2015)
*Trump tariffs (2018 U.S.-Canada trade dispute)
*Japan–South Korea trade dispute (2019–2023)
*[[Biology:Tuna-Dolphin GATT Case (I and II)|Tuna-Dolphin GATT Case (I and II)]], part of a larger tuna trade war (1970s-present)
*Canada–United States softwood lumber dispute (1982–present)
*Catfish Dispute U.S. versus Vietnam (2001–present)
*Australia–China trade war, (2017/18–present)
*China–United States trade war (2018–present)

==See also==
<!--alphabetically-->
*[[Finance:Balance of trade|Balance of trade]]
*[[Finance:Currency war|Currency war]]
*Economic sanctions
*[[Social:Economic warfare|Economic warfare]]
*[[Finance:Trade barrier|Trade barrier]]
*Water conflict

==References==
{{Reflist}}

==Bibliography==
*{{cite book | author=Rothgeb, John | title=U.S. Trade Policy | location=Washington D.C. | publisher=CQ Press | year=2001 | isbn=1-56802-522-X }}
*Smoot-Hawley Tariff Act. (2005). Encyclopædia Britannica. Retrieved October 15, 2005, from [http://search.eb.com/eb/article-9396766 Encyclopædia Britannica Online]
*Perju, Genoveva Elena, Retaliatory Disagreement Point with Asymmetric Countries: Evidence from European Wine Sector During Enlargement (June 15, 2009). Available at SSRN: {{SSRN|1435993}} or <nowiki>http://dx.doi.org/10.2139/ssrn.1435993</nowiki> 



[[Category:Economic warfare]]

{{Sourceattribution|Trade war}}