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This article is part of The Conversation’s “Business Basics” series where we ask experts to discuss key concepts in business, economics and finance.
Thanks to US President-elect Donald Trump, the term “trade war” is back in the headlines. Trump campaigned successfully on a platform of aggressive trade policies, and since being elected, has only doubled down on this posture.
On Tuesday, he threatened Mexico and Canada with new 25% tariffs on all goods, and a separate “additional” 10% tariff on China “above any additional tariffs”.
While the term might conjure up dramatic images of battlefield tactics, the real economic impact of any looming trade war is likely to hit much closer to home – both for Americans and the rest of the world.
Global supply chains are deeply interlinked. That means a major trade war initiated by the US could push up the prices of all kinds of goods – from new cars to Australian-inspired avocado on toast.
To understand where we might be headed, it’s worth unpacking the metaphor. What exactly is a trade war? What are the “weapons” countries use? Perhaps most importantly – can either side win?
The weapons of war
There are many “weapons” available to a country in a trade war, but tariffs are often a popular choice. This is simply an extra tax put on a product as it crosses a border as an import.
For example, all else equal, Trump’s proposed 25% tariff on goods from Canada would bump the price of a $32,000 Canadian-built car up to $40,000.
The Bold Bureau/Shutterstock
Tariffs are usually paid by whoever is importing the product and paid to the government of the importing country.
That means the extra cost is almost always passed on to consumers.
Why would any government want to force prices up like that? Because it gives locally produced goods without the tariff a cost advantage.
That might seem like a reasonable way to protect local industries, but tariffs can backfire in unexpected ways. Consider how many foreign parts go into “American-made” products.
When a car rolls off a US assembly line, it’s built from thousands of components – many of which have to be imported from other countries. If those parts face tariffs, manufacturing costs rise for domestic producers, and prices rise further for domestic consumers.
Limiting what comes in
There are other trade restrictions, too, referred to as non-tariff measures.
Quotas are one example. These place limits on how many units of something can be imported during a specific time period.
Returning to our earlier example, the US could choose to set an import quota on that same Canadian-made car of one million per year. Once that limit had been reached, no more Canadian cars could enter the country, even if consumers wanted to buy them.
This artificial scarcity can drive up prices because demand stays the same while supply is restricted. Like tariffs, the theory is that those higher prices for imports will cause consumers to favour locally manufactured goods.
Sean Rayford/AP
More covert weapons
Some other trade restrictions are more covert – arguably easier to conceal and deny.
Imagine your export permit was cancelled without explanation or your shipment of lychees was left rotting in a foreign port for reasons that seem to be political.
Or your country suddenly disappears from another country’s electronic export system, meaning that you now cannot export anything there at all (this happened to Lithuania, which was removed from China’s customs database).
These are the sorts of trade war tactics that my research team and I have been studying in our Weaponised Trade Project.
We have collected nearly 100 examples of coercive trade weapons over the past decade, used by a wide range of countries against their competitors.
Today’s tariff is tomorrow’s trade war
Once deployed, trade weapons can cause political tensions to escalate rapidly. Other countries often retaliate with their own tit-for-tat measures. From there, they can escalate into full-blown trade wars.
The new president of Mexico, Claudia Sheinbaum, has already warned this may happen, in response to Trump’s threats earlier this week.
One tariff would be followed by another in response, and so on until we put at risk common businesses.
We’ve had some nasty trade wars before. One of the most notorious examples from history were the “beggar-thy-neighbour” tariffs and other protectionist policies of the interwar years, which deepened the Great Depression.
You might remember this from the classic movie Ferris Bueller’s Day Off:
When countries restrict tradeprices typically rise for consumers, jobs can be lost in industries dependent on foreign materials, and trade and economic growth slow on both sides.
Politicians might claim victory when their foreign competitors make concessions, but economists generally agree that trade wars create more losers than winners.
into a high-quality, completely original piece for my website.
The rewritten article must:
Be entirely reimagined and rewritten, with no sentences or phrasing resembling
This article is part of The Conversation’s “Business Basics” series where we ask experts to discuss key concepts in business, economics and finance.
Thanks to US President-elect Donald Trump, the term “trade war” is back in the headlines. Trump campaigned successfully on a platform of aggressive trade policies, and since being elected, has only doubled down on this posture.
On Tuesday, he threatened Mexico and Canada with new 25% tariffs on all goods, and a separate “additional” 10% tariff on China “above any additional tariffs”.
While the term might conjure up dramatic images of battlefield tactics, the real economic impact of any looming trade war is likely to hit much closer to home – both for Americans and the rest of the world.
Global supply chains are deeply interlinked. That means a major trade war initiated by the US could push up the prices of all kinds of goods – from new cars to Australian-inspired avocado on toast.
To understand where we might be headed, it’s worth unpacking the metaphor. What exactly is a trade war? What are the “weapons” countries use? Perhaps most importantly – can either side win?
The weapons of war
There are many “weapons” available to a country in a trade war, but tariffs are often a popular choice. This is simply an extra tax put on a product as it crosses a border as an import.
For example, all else equal, Trump’s proposed 25% tariff on goods from Canada would bump the price of a $32,000 Canadian-built car up to $40,000.
The Bold Bureau/Shutterstock
Tariffs are usually paid by whoever is importing the product and paid to the government of the importing country.
That means the extra cost is almost always passed on to consumers.
Why would any government want to force prices up like that? Because it gives locally produced goods without the tariff a cost advantage.
That might seem like a reasonable way to protect local industries, but tariffs can backfire in unexpected ways. Consider how many foreign parts go into “American-made” products.
When a car rolls off a US assembly line, it’s built from thousands of components – many of which have to be imported from other countries. If those parts face tariffs, manufacturing costs rise for domestic producers, and prices rise further for domestic consumers.
Limiting what comes in
There are other trade restrictions, too, referred to as non-tariff measures.
Quotas are one example. These place limits on how many units of something can be imported during a specific time period.
Returning to our earlier example, the US could choose to set an import quota on that same Canadian-made car of one million per year. Once that limit had been reached, no more Canadian cars could enter the country, even if consumers wanted to buy them.
This artificial scarcity can drive up prices because demand stays the same while supply is restricted. Like tariffs, the theory is that those higher prices for imports will cause consumers to favour locally manufactured goods.
Sean Rayford/AP
More covert weapons
Some other trade restrictions are more covert – arguably easier to conceal and deny.
Imagine your export permit was cancelled without explanation or your shipment of lychees was left rotting in a foreign port for reasons that seem to be political.
Or your country suddenly disappears from another country’s electronic export system, meaning that you now cannot export anything there at all (this happened to Lithuania, which was removed from China’s customs database).
These are the sorts of trade war tactics that my research team and I have been studying in our Weaponised Trade Project.
We have collected nearly 100 examples of coercive trade weapons over the past decade, used by a wide range of countries against their competitors.
Today’s tariff is tomorrow’s trade war
Once deployed, trade weapons can cause political tensions to escalate rapidly. Other countries often retaliate with their own tit-for-tat measures. From there, they can escalate into full-blown trade wars.
The new president of Mexico, Claudia Sheinbaum, has already warned this may happen, in response to Trump’s threats earlier this week.
One tariff would be followed by another in response, and so on until we put at risk common businesses.
We’ve had some nasty trade wars before. One of the most notorious examples from history were the “beggar-thy-neighbour” tariffs and other protectionist policies of the interwar years, which deepened the Great Depression.
You might remember this from the classic movie Ferris Bueller’s Day Off:
When countries restrict tradeprices typically rise for consumers, jobs can be lost in industries dependent on foreign materials, and trade and economic growth slow on both sides.
Politicians might claim victory when their foreign competitors make concessions, but economists generally agree that trade wars create more losers than winners.
, while maintaining the same key facts, dates, and quotes. The new text should feel completely fresh, naturally flowing, and as if written from scratch by a professional human news editor.
Retain all people’s declarations in quotation marks (” “) exactly as they appear in
This article is part of The Conversation’s “Business Basics” series where we ask experts to discuss key concepts in business, economics and finance.
Thanks to US President-elect Donald Trump, the term “trade war” is back in the headlines. Trump campaigned successfully on a platform of aggressive trade policies, and since being elected, has only doubled down on this posture.
On Tuesday, he threatened Mexico and Canada with new 25% tariffs on all goods, and a separate “additional” 10% tariff on China “above any additional tariffs”.
While the term might conjure up dramatic images of battlefield tactics, the real economic impact of any looming trade war is likely to hit much closer to home – both for Americans and the rest of the world.
Global supply chains are deeply interlinked. That means a major trade war initiated by the US could push up the prices of all kinds of goods – from new cars to Australian-inspired avocado on toast.
To understand where we might be headed, it’s worth unpacking the metaphor. What exactly is a trade war? What are the “weapons” countries use? Perhaps most importantly – can either side win?
The weapons of war
There are many “weapons” available to a country in a trade war, but tariffs are often a popular choice. This is simply an extra tax put on a product as it crosses a border as an import.
For example, all else equal, Trump’s proposed 25% tariff on goods from Canada would bump the price of a $32,000 Canadian-built car up to $40,000.
The Bold Bureau/Shutterstock
Tariffs are usually paid by whoever is importing the product and paid to the government of the importing country.
That means the extra cost is almost always passed on to consumers.
Why would any government want to force prices up like that? Because it gives locally produced goods without the tariff a cost advantage.
That might seem like a reasonable way to protect local industries, but tariffs can backfire in unexpected ways. Consider how many foreign parts go into “American-made” products.
When a car rolls off a US assembly line, it’s built from thousands of components – many of which have to be imported from other countries. If those parts face tariffs, manufacturing costs rise for domestic producers, and prices rise further for domestic consumers.
Limiting what comes in
There are other trade restrictions, too, referred to as non-tariff measures.
Quotas are one example. These place limits on how many units of something can be imported during a specific time period.
Returning to our earlier example, the US could choose to set an import quota on that same Canadian-made car of one million per year. Once that limit had been reached, no more Canadian cars could enter the country, even if consumers wanted to buy them.
This artificial scarcity can drive up prices because demand stays the same while supply is restricted. Like tariffs, the theory is that those higher prices for imports will cause consumers to favour locally manufactured goods.
Sean Rayford/AP
More covert weapons
Some other trade restrictions are more covert – arguably easier to conceal and deny.
Imagine your export permit was cancelled without explanation or your shipment of lychees was left rotting in a foreign port for reasons that seem to be political.
Or your country suddenly disappears from another country’s electronic export system, meaning that you now cannot export anything there at all (this happened to Lithuania, which was removed from China’s customs database).
These are the sorts of trade war tactics that my research team and I have been studying in our Weaponised Trade Project.
We have collected nearly 100 examples of coercive trade weapons over the past decade, used by a wide range of countries against their competitors.
Today’s tariff is tomorrow’s trade war
Once deployed, trade weapons can cause political tensions to escalate rapidly. Other countries often retaliate with their own tit-for-tat measures. From there, they can escalate into full-blown trade wars.
The new president of Mexico, Claudia Sheinbaum, has already warned this may happen, in response to Trump’s threats earlier this week.
One tariff would be followed by another in response, and so on until we put at risk common businesses.
We’ve had some nasty trade wars before. One of the most notorious examples from history were the “beggar-thy-neighbour” tariffs and other protectionist policies of the interwar years, which deepened the Great Depression.
You might remember this from the classic movie Ferris Bueller’s Day Off:
When countries restrict tradeprices typically rise for consumers, jobs can be lost in industries dependent on foreign materials, and trade and economic growth slow on both sides.
Politicians might claim victory when their foreign competitors make concessions, but economists generally agree that trade wars create more losers than winners.
, incorporating them naturally into the rewritten text.
Preserve all original HTML tags from
This article is part of The Conversation’s “Business Basics” series where we ask experts to discuss key concepts in business, economics and finance.
Thanks to US President-elect Donald Trump, the term “trade war” is back in the headlines. Trump campaigned successfully on a platform of aggressive trade policies, and since being elected, has only doubled down on this posture.
On Tuesday, he threatened Mexico and Canada with new 25% tariffs on all goods, and a separate “additional” 10% tariff on China “above any additional tariffs”.
While the term might conjure up dramatic images of battlefield tactics, the real economic impact of any looming trade war is likely to hit much closer to home – both for Americans and the rest of the world.
Global supply chains are deeply interlinked. That means a major trade war initiated by the US could push up the prices of all kinds of goods – from new cars to Australian-inspired avocado on toast.
To understand where we might be headed, it’s worth unpacking the metaphor. What exactly is a trade war? What are the “weapons” countries use? Perhaps most importantly – can either side win?
The weapons of war
There are many “weapons” available to a country in a trade war, but tariffs are often a popular choice. This is simply an extra tax put on a product as it crosses a border as an import.
For example, all else equal, Trump’s proposed 25% tariff on goods from Canada would bump the price of a $32,000 Canadian-built car up to $40,000.
The Bold Bureau/Shutterstock
Tariffs are usually paid by whoever is importing the product and paid to the government of the importing country.
That means the extra cost is almost always passed on to consumers.
Why would any government want to force prices up like that? Because it gives locally produced goods without the tariff a cost advantage.
That might seem like a reasonable way to protect local industries, but tariffs can backfire in unexpected ways. Consider how many foreign parts go into “American-made” products.
When a car rolls off a US assembly line, it’s built from thousands of components – many of which have to be imported from other countries. If those parts face tariffs, manufacturing costs rise for domestic producers, and prices rise further for domestic consumers.
Limiting what comes in
There are other trade restrictions, too, referred to as non-tariff measures.
Quotas are one example. These place limits on how many units of something can be imported during a specific time period.
Returning to our earlier example, the US could choose to set an import quota on that same Canadian-made car of one million per year. Once that limit had been reached, no more Canadian cars could enter the country, even if consumers wanted to buy them.
This artificial scarcity can drive up prices because demand stays the same while supply is restricted. Like tariffs, the theory is that those higher prices for imports will cause consumers to favour locally manufactured goods.
Sean Rayford/AP
More covert weapons
Some other trade restrictions are more covert – arguably easier to conceal and deny.
Imagine your export permit was cancelled without explanation or your shipment of lychees was left rotting in a foreign port for reasons that seem to be political.
Or your country suddenly disappears from another country’s electronic export system, meaning that you now cannot export anything there at all (this happened to Lithuania, which was removed from China’s customs database).
These are the sorts of trade war tactics that my research team and I have been studying in our Weaponised Trade Project.
We have collected nearly 100 examples of coercive trade weapons over the past decade, used by a wide range of countries against their competitors.
Today’s tariff is tomorrow’s trade war
Once deployed, trade weapons can cause political tensions to escalate rapidly. Other countries often retaliate with their own tit-for-tat measures. From there, they can escalate into full-blown trade wars.
The new president of Mexico, Claudia Sheinbaum, has already warned this may happen, in response to Trump’s threats earlier this week.
One tariff would be followed by another in response, and so on until we put at risk common businesses.
We’ve had some nasty trade wars before. One of the most notorious examples from history were the “beggar-thy-neighbour” tariffs and other protectionist policies of the interwar years, which deepened the Great Depression.
You might remember this from the classic movie Ferris Bueller’s Day Off:
When countries restrict tradeprices typically rise for consumers, jobs can be lost in industries dependent on foreign materials, and trade and economic growth slow on both sides.
Politicians might claim victory when their foreign competitors make concessions, but economists generally agree that trade wars create more losers than winners.
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Write with a human-like tone and style, avoiding repetitive phrasing, robotic patterns, or overly formal language. Use creative yet professional language, focusing on engaging and authentic storytelling.
Follow Associated Press (AP) guidelines for style, clarity, and professionalism, including proper use of numbers, punctuation, and attribution.
Be optimized for SEO, using structured HTML tags (H1, H2, H3) and adhering to Google’s E-E-A-T standards. Write a new, keyword-optimized headline that feels natural and engaging.
Exclude all references to the original source or publication, ensuring no identifiable details about
This article is part of The Conversation’s “Business Basics” series where we ask experts to discuss key concepts in business, economics and finance.
Thanks to US President-elect Donald Trump, the term “trade war” is back in the headlines. Trump campaigned successfully on a platform of aggressive trade policies, and since being elected, has only doubled down on this posture.
On Tuesday, he threatened Mexico and Canada with new 25% tariffs on all goods, and a separate “additional” 10% tariff on China “above any additional tariffs”.
While the term might conjure up dramatic images of battlefield tactics, the real economic impact of any looming trade war is likely to hit much closer to home – both for Americans and the rest of the world.
Global supply chains are deeply interlinked. That means a major trade war initiated by the US could push up the prices of all kinds of goods – from new cars to Australian-inspired avocado on toast.
To understand where we might be headed, it’s worth unpacking the metaphor. What exactly is a trade war? What are the “weapons” countries use? Perhaps most importantly – can either side win?
The weapons of war
There are many “weapons” available to a country in a trade war, but tariffs are often a popular choice. This is simply an extra tax put on a product as it crosses a border as an import.
For example, all else equal, Trump’s proposed 25% tariff on goods from Canada would bump the price of a $32,000 Canadian-built car up to $40,000.
The Bold Bureau/Shutterstock
Tariffs are usually paid by whoever is importing the product and paid to the government of the importing country.
That means the extra cost is almost always passed on to consumers.
Why would any government want to force prices up like that? Because it gives locally produced goods without the tariff a cost advantage.
That might seem like a reasonable way to protect local industries, but tariffs can backfire in unexpected ways. Consider how many foreign parts go into “American-made” products.
When a car rolls off a US assembly line, it’s built from thousands of components – many of which have to be imported from other countries. If those parts face tariffs, manufacturing costs rise for domestic producers, and prices rise further for domestic consumers.
Limiting what comes in
There are other trade restrictions, too, referred to as non-tariff measures.
Quotas are one example. These place limits on how many units of something can be imported during a specific time period.
Returning to our earlier example, the US could choose to set an import quota on that same Canadian-made car of one million per year. Once that limit had been reached, no more Canadian cars could enter the country, even if consumers wanted to buy them.
This artificial scarcity can drive up prices because demand stays the same while supply is restricted. Like tariffs, the theory is that those higher prices for imports will cause consumers to favour locally manufactured goods.
Sean Rayford/AP
More covert weapons
Some other trade restrictions are more covert – arguably easier to conceal and deny.
Imagine your export permit was cancelled without explanation or your shipment of lychees was left rotting in a foreign port for reasons that seem to be political.
Or your country suddenly disappears from another country’s electronic export system, meaning that you now cannot export anything there at all (this happened to Lithuania, which was removed from China’s customs database).
These are the sorts of trade war tactics that my research team and I have been studying in our Weaponised Trade Project.
We have collected nearly 100 examples of coercive trade weapons over the past decade, used by a wide range of countries against their competitors.
Today’s tariff is tomorrow’s trade war
Once deployed, trade weapons can cause political tensions to escalate rapidly. Other countries often retaliate with their own tit-for-tat measures. From there, they can escalate into full-blown trade wars.
The new president of Mexico, Claudia Sheinbaum, has already warned this may happen, in response to Trump’s threats earlier this week.
One tariff would be followed by another in response, and so on until we put at risk common businesses.
We’ve had some nasty trade wars before. One of the most notorious examples from history were the “beggar-thy-neighbour” tariffs and other protectionist policies of the interwar years, which deepened the Great Depression.
You might remember this from the classic movie Ferris Bueller’s Day Off:
When countries restrict tradeprices typically rise for consumers, jobs can be lost in industries dependent on foreign materials, and trade and economic growth slow on both sides.
Politicians might claim victory when their foreign competitors make concessions, but economists generally agree that trade wars create more losers than winners.
remain.
Be between 800–1,200 words long, with clear subheadings for readability.
Provide only the final rewritten article text with all original HTML tags properly retained and integrated. Ensure the content reads naturally, as if written by a skilled human journalist, with no robotic tone or AI-like repetition. Do not include any notes, explanations, or commentary.
What are the potential economic consequences of President Trump’s proposed tariffs on Canada, Mexico, and China?
President Trump threatens to impose tariffs on Canada, Mexico, and China. This action, according to experts, risks retaliation and a damaging economic war, which could escalate into full-blown trade wars with these countries. [[1]]
Tariffs are usually paid by the importer and go to the government of the importing country. The cost is typically passed on to consumers. Tariffs are designed to give locally produced goods a cost advantage, but they can backfire by increasing prices for consumers and hurting industries that rely on imported components. [[[None]]
Additionally, there are non-tariff measures like quotas, which limit the number of imported goods allowed into a country. These measures can also lead to higher prices for consumers.
Trade restrictions, whether tariffs or quotas, can be overt or covert. Covert actions like cancelling export permits without explanation or blocking exports through convoluted bureaucratic procedures are harder to detect and address. These tactics can escalate quickly into trade wars.
The current threat by the President of the United States to impose tariffs on Canada, Mexico, and China, is an example of how trade actions can escalate political tensions and ultimately lead to harmful consequences for all participating countries.