Trade Wars and Tariffs – Winners, Losers, and the Long-Term Impacts

Santiago Bel
December 14, 2024

In 2018, Donald Trump's imposition of tariffs on Chinese imports marked a significant shift in the global trading system, differing from previous attempts to exert economic pressure on industrialized countries. For some time, such references conveyed a sense of being patriotic and protective. However, like most economic tools, tariffs cut both ways.

 Tariff increases cause a ripple effect throughout major industries, putting pressure on companies in construction, car manufacturing, and beyond.

To initiate the U.S. trade wars, the Trump administration has imposed tariffs on a variety of industrial and electronic products. In response, China has taken action by imposing tariffs on certain American products, such as soybeans and corn, that are imported there specifically to punish U.S. farmers economically. U.S. manufacturers experienced increased costs, farmers lost important buyers, and consumers were forced to pay greater amounts for various necessities.

The argument centered on the idea that fear of economic loss and unfair trade practices drove the decision to impose tariffs, which was intended to motivate China to cooperate and adopt fairer trade policies. The underlying rationale for imposing tariffs is to encourage cooperation and reduce unfair trade practices, but the actual outcome is often more complex and influenced by various factors, including geopolitical relationships and market dynamics. The costs ended up being transferred to the consumers. The U.S. trade deficit remains near steady despite rampant political and public issues in the country.

Markets, like U.S. steel, initially experienced a brief increase in output.

The majority of tariffs that were imposed by President Trump remain active to this day, mainly because of their political unpopularity rather than preventative effects on deficits.y most of the parties. "Free trade" has turned into a "secure trade" where you don't have to worry about being too dependent on a particular country for the things your country needs, like technology and energy.

Countries engaging in trade wars not only diminish international commerce but also impact a country's consumer population and business owners.creasingly globalized world. In foreign affairs, the United States and several of its regional allies have joined together to create coalitions within the world arena.

A temporary period may see tariffs as job defense; a politician could celebrate a victory by reopening a local steel mill, but economists warn that these gains are often temporary and usually come at a cost.

Inflation rises slightly because imported goods cost more. A phone that would have sold for $900 might now be $950. Groceries creep up as transportation and packaging costs climb, leading to reduced spending.

The modern global economy is distinct from the Cold War era due to its increased complexity, characterized by interconnected supply chains, multinational corporations, and the rise of emerging economies, making it more challenging to navigate and manage. In twelve countries, software written and manufactured in one country could be made from multiple sources. Cutting connections through tariffs would thoroughly destroy an era, plunging mankind and the global economy to an even lower state.

Modern economics encourages countries to not only compete for low production costs but also to exercise control over other nations. Any means of being able to form, produce, and sustain life can be equated to control of survival. China's tensions with the US did not start with President Trump or the Trade War; their toughest competition comes from the fact that they're spending a lot of money on these industries.

So, who really wins a trade war? In truth, no one truly wins. Politicians might score short-term political victories. Some industries might get a temporary boost. By and large, tariffs are believed to hurt economies by halting growth, raising prices, and reducing trade trust between businesspeople. The long-term solution isn't isolation–it's balance. Our markets must support fair trade. We must protect these countries and others. Competition is necessary to save our world, but we must still work collectively, cooperate, and thrive.