trade war

Examples of trade war in the following topics:

• Economics

  • Trade barriers are government-induced restrictions on international trade, which generally decrease overall economic efficiency.
  • Trade barriers are government-induced restrictions on international trade.
  • Man-made trade barriers come in several forms, including:
  • Most trade barriers work on the same principle–the imposition of some sort of cost on trade that raises the price of the traded products.
  • If two or more nations repeatedly use trade barriers against each other, then a trade war results.

• The Argument Against Barriers

  • Most trade barriers work on the same principle: the imposition of some sort of cost on trade that raises the price of the traded products.
  • If two or more nations repeatedly use trade barriers against each other, then a trade war results
  • Trade barriers are often criticized for the effect they have on the developing world.
  • If international trade is economically enriching, imposing barriers to such exchanges will prevent the nation from fully realizing the economic gains from trade and must reduce welfare.
  • International trade is the exchange of goods and services across national borders.

• Political and legal risk in international business

  • Political risk may also result from events outside of government controls such as war, revolution, terrorism, labor strikes, and extortion.
  • AON (www.aon.com), for example, categorizes risk based on economic; exchange transfer; strike, riot, or civil commotion; war; terrorism; sovereign non-payment; legal and regulatory; political interference; and supply chain vulnerability.
  • Changes in policies can impose more restrictions on foreign companies to operate or limit their access to financing and trade.
  • To solve domestic problems, governments often use trade relations.
  • Trade as a political tool may cause an international business to be caught in a trade war or embargo (Schaffer et al, 2005).

• The Argument for Barriers

  • It is asserted that trade has created jobs for foreign workers at the expense of American workers.
  • It is more accurate to say that trade both creates and destroys jobs in the economy in line with market forces.
  • But it is also true that workers in export industries benefit from trade.
  • Yet, concurrent with the large expansion of trade over the past 25 years, real wages (i.e., inflation adjusted wages) of American workers grew more slowly than in the earlier post-war period, and the inequality of wages between the skilled and less skilled worker rose sharply.
  • Was trade the force behind this deteriorating wage performance?

• International Exchange of Money

  • Exchange rates are determined in the foreign exchange market, which is open to a wide range of different types of buyers and sellers where currency trading is continuous (24 hours a day except weekends, i.e., trading from 20:15 GMT on Sunday until 22:00 GMT Friday).
  • The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date .
  • The foreign exchange market (forex, FX, or currency market) is a form of exchange for the global decentralized trading of international currencies.
  • The foreign exchange market assists international trade and investment by enabling currency conversion.
  • It also supports direct speculation in the value of currencies, and the carry trade, speculation based on the interest rate differential between two currencies.

• Countertrade

  • Switch trading: Party A and Party B are countertrading salt for sugar.
  • A monetary valuation can, however, be used in counter trade for accounting purposes.
  • Switch trading: Practice in which one company sells to another its obligation to make a purchase in a given country.
  • Countertrade also occurs when countries lack sufficient hard currency or when other types of market trade are impossible.
  • In 2000, India and Iraq agreed on an "oil for wheat and rice" barter deal, subject to UN approval under Article 50 of the UN Persian Gulf War sanctions, that would facilitate 300,000 barrels of oil delivered daily to India at a price of $6.85 a barrel, while Iraq oil sales into Asia were valued at about $22 a barrel.

• Absolute Advantage and the Balance of Trade

  • Absolute advantage and balance of trade are two important aspects of international trade that affect countries and organizations.
  • Absolute advantage and balance of trade are two important aspects of international trade that affect countries and organizations .
  • A positive balance is known as a trade surplus if it consists of exporting more than is imported; a negative balance is referred to as a trade deficit or, informally, a trade gap.
  • The balance of trade is sometimes divided into a goods and a services balance.
  • The European Free Trade Agreement has helped countries international trade without worrying about absolute advantage and increases net exports.

• Common Markets

  • A common market is the first stage towards a single market and may be limited initially to a free trade area.
  • A common market is a first stage towards a single market and may be limited initially to a free trade area with relatively free movement of capital and of services, but not so advanced in reduction of the rest of the trade barriers.
  • However, France faced some setbacks due to its war with Algeria.
  • The six states that founded the EEC and the other two communities were known as the "inner six" (the "outer seven" were those countries who formed the European Free Trade Association).

• Technological Barriers

  • Standards-related trade measures, known in WTO parlance as technical barriers to trade play a critical role in shaping global trade.
  • As tariff barriers to industrial and agricultural trade have fallen, standards-related measures of this kind have emerged as a key concern.
  • These standards-related trade measures, known in World Trade Organization (WTO) parlance as "technical barriers to trade," play a critical role in shaping the flow of global trade.
  • But standards-related measures that are non-transparent, discriminatory, or otherwise unwarranted can act as significant barriers to U.S. trade.
  • Most countries are now part of the World Trade Organization.

• The International Monetary Fund (IMF)

  • The IMF seeks to promote international economic cooperation, international trade, employment, and exchange rate stability.
  • The IMF's stated goal was to stabilize exchange rates and assist the reconstruction of the world's international payment system post-World War II.
  • The IMF describes itself as "an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty. "
  • The organization's stated objectives are to promote international economic cooperation, international trade, employment, and exchange rate stability, including by making financial resources available to member countries to meet balance of payments needs.
  • Member countries of the IMF have access to information on the economic policies of all member countries, the opportunity to influence other members' economic policies, technical assistance in banking, fiscal affairs, and exchange matters, financial support in times of payment difficulties, and increased opportunities for trade and investment.