Trade War

A trade war is an economic conflict between countries. It occurs when countries engage in a series of actions, such as imposing tariffs (taxes) and trade barriers on each other’s goods and services. These actions escalate trade tensions, often leading to a decrease in international trade and causing disruptions in the global economy.

Example:
In 2002, George Bush added 8% to 30% tariffs on imported steel goods to support the struggling American steel industry. This tariff affected 29% of imports, leading the European Union (EU) to file a complaint to the World Trade Organization (WTO). The EU also threatened to put 100% tariffs on American products like fruit juice, T-shirts, etc. However, in December 2003, George Bush removed the tariffs, resolving the trade war.