The Consequences of Trade Wars

 

The purpose of the trade war is not only to reduce the competitiveness of the adversary country by economic measures but also to change its political course. It is difficult to separate one from the other. When one country tries to change the political course of another country, this is done, most often, not from altruism. If the adversary country has managed to become a strong competitor in the current political course, then with a change in policy its competitiveness should presumably decrease.

 

So, “politics is the continuation of the economy by other means”, to rephrase von Clausewitz. It turns out a kind of triad: economy - politics - war. The trouble is that the boundaries within this triad are blurred. If a country tries to achieve political results by economic measures, sometimes it is very difficult to stop in time, and then the war begins.

 

Take the Second World War as an example. Why has Japan attacked a deliberately stronger America? America either could not stop in time exerting the economic pressure or pushed Japan to war:

 

[Quoted from: Why Did Japan Attack Pearl Harbor? by Sarah Pruitt, https://www.history.com/news/why-did-japan-attack-pearl-harbor]

 

During the Great Depression of the 1930s, Japan sought to solve its economic and demographic woes by forcing its way into China, starting in 1931 with an invasion of Manchuria. 

In July 1937, a clash at Beijing’s Marco Polo Bridge began another Sino-Japanese war. That December, after Japanese forces captured Nanjing (Nanking), the capital of the Chinese Nationalist Party, or Guomindang (Kuomintang), they proceeded to carry out six weeks of mass killings and rapes now infamous as the Nanjing Massacre.

In light of such atrocities, the United States began passing economic sanctions against Japan, including trade embargoes on aircraft exports, oil and scrap metal, among other key goods, and gave economic support to Guomindang forces.

Tokyo and Washington negotiated for months leading up to the Pearl Harbor attack, without success. While the United States hoped embargoes on oil and other key goods would lead Japan would halt its expansionism, the sanctions and other penalties actually convinced Japan to stand its ground, and stirred up the anger of its people against continued Western interference in Asian affairs.

To Japan, war with the United States had become to seem inevitable, in order to defend its status as a major world power. 

 

The embargo is the toughest type of trade war. America used it to force Japan abandon its war policy and stop competing with America in the Pacific. This economic pressure led to war.

 

Is there a danger that the trade wars that the US is waging today will lead to a “hot” war? I can’t predict that. The risk, as history shows, is significant.

 

How High Tariffs Could Lead to Financial Crisis? | Financial and Systemic Crises | How the Systemic Crises Occur

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