One of the largest trade war in history is going on between the US and China. It has benefited some countries
like Argentina and Brazil as their exports of soyabean has increased to China
while some countries are suffering which includes Luxemburg and Hungary as they
have an export oriented market economy
which is heavily dependent on foreign trade. Earlier many countries started
developing because of globalization including India, where a major change in
the economy is seen after the LPG (Liberalisation,
Privatization, Globalization) policy of the year
1991. But, the concept of trade war is reducing the impact of globalization.
Jack Ma, regarding trade war, has said that
“A trade war would be a disaster for the world.”
In a trade war as one country imposes tariffs on another country to reduce its imports and to produce inside the country, which means
that less of imports, and if a country is not importing then the other country
will also reduce imports which will lead to a reduction
in both imports and exports. If every country reduces its imports then it will
lead to a shift again, but this time from globalization to de-globalization.
Major automakers in the US are suffering as they have outsourced manufacturing of various
parts in different countries like
Germany, China, etc. but due to the imposition
of import tariffs, cost of these parts have increased. Mr. Trump's decision regarding trade war is like,
in football a player is defending its goal post, but instead, he scores an own
goal, because despite huge tariffs, US trade deficit has widened. Although the trade war may not lead to the end of globalization, it will definitely reduce
the global existence of an economy.
Thank You
Regards
Kautilya
IBS Mumbai
Kautilya
IBS Mumbai
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