22+ Pros and Cons of Trade War (Explained)

A trade war is defined as an economic conflict between states that is a result of a trend of massive protectionism in which the respective states raise tariffs or create sanctions and other trade barriers against the state that they are opposing. This is due to the response of the other nations creating trade barriers to protect their own interests.

Trade wars can be also defined as a result of extreme protectionism, a practice that makes the states only look at their own interests without a care causing both nations’ output compositions to reach unsustainable levels of competition.


1. Increased Competition

1. Risk

2. . Increased Living Standard

2. Increased Living Standard

3. Better Employment

3. Issues of Rent

4. Trade Wars are Profitable

4. Problems of Protests

5. Protectionism Ensures Better Base

5. Increased Costs

6. Richer Economy

6. Decreased Security

7. Military Benefits

7. Strikes

8. Tariffs are Respected

9. Economic Restructuring

Advantages OF TRADE WAR: 

  • Competition:

Trade wars are known for increasing the productivity of the country that is fighting the trade war to better the production relations and output of one’s own country when it is compared to the other country. Trade wars act as a motivation to the working people of the country.

  • Increased Living Standard:

Trade wars are often very productive for the country that has been fighting the trade war with the right spirit of competition. This makes it difficult for the other countries to compete with the country winning the trade war, hence raising the standard of living for the general population of the victorious country.

  • Better Employment:

The trade war between countries not only enhances the employment levels of the residents of the country, but also ensures employment from other parts of the world. Various outsourcing projects are set up to finance the trade war. This ensures employment for many people across the world.

  • Trade Wars are Profitable:

Trade War is often profitable for the capitalist class of the country. It is also because the capitalists of the country invest heavily when there is a trade war going on to ensure help to the country. The country is benefitted by these initiatives and ventures.

5. Protectionism Ensures Better Base:

The country that is practicing protectionism ensures that the country has a strong economic base before they start dealing with other countries, hence ensuring that the country is not exploited by the other country. This contributes to the social position of the country in the world.

  • Richer Economy:

Trade war also ensures that the production of the country practicing the trade war is raised through a richer economy and a better social positioning in the world. This makes the country more respectable because they can now compete with international markets and ensure profit.

  • Military Benefits:

Trade wars keep the military running and make them sharper. The military when in the midst of the trade war are always on more alert and better trained to take part in the struggles of the country. This makes the trade war between nations more intense and keeps the people more disciplined.

  • Tariffs are Respected:

Trade Wars also ensure that the tariffs of various countries do not rise up in the matter of days and months, but have some restraint when raising tariffs. Trade Wars ensure that the raising of tariffs is kept aside by the countries as a measure of safeguarding their own interests. 

  • Economic Restructuring:

When in trade war, the countries practicing this war have the chance of keeping the trade wars going by keeping the import and export of the economy functioning and ensuring that the economy can be restructured and rebuilt with the help of the situation. This keeps the country functioning.

Disadvantages OF TRADE WARS:

  • Risk:

The impending catastrophe of the collapse of the economy hangs over the head like a ghost win the midst of a trade war. This is one of the reasons why trade wars are very risky. One wrong move or a move that strengthens the positions of the opposition ensures that the country is in economic risk.

  • Livelihood Issues:

When winning a trade war it is quite easy to continue with a good livelihood, but the moment the trade war turns away from the control of one’s own country and gets into the hands of the other, the trade war will result in the deaths of many people and the loss of livelihood of many.

  • Issues of Rent:

During trade wars the private property in the country is kept in the form of property assets. This usually has higher rents because they ensure the stable income of the landlord. This is because the risk that the economy entails when going through trade war could fall out of place at any point. 

  • Problems of Protests:

During trade wars a large section of the country begins protesting. This becomes increasingly difficult to manage due to the impending trade war and the already problematic tendencies of politicians who at the first chance want to break away protests. This may result in mass anarchy across the country.

  • Increased Costs:

When in trade war, the costs of raw materials imported from other countries goes up. This results in the increase of price of all goods in the country. Though this can be managed with a separation of the taxes from the consumers, it is difficult for the capitalists.

  • Decreased Security:

Although the trade wars restrict the possibility of business deals between countries, it also decreases the security of not having all out war. The only thing that keeps countries from fighting wars with each other is the ability to trade. Hence putting this in jeopardy increases the possibility of war.

  • Strikes:

Trade wars are very often accompanied by international strikes in protest of trade wars. This keeps the countries and the businessmen in those countries from ensuring that they can do good business to benefit their country. The strikes by airplane companies, etc. keep the trade war intensified while at the same time hurting business.

The trade war is a good alternative to regular way of life as it provides an opportunity to both countries in trying to ensure that the countries fighting the trade war keep off the need to fight full fledged wars with each other. Trade wars also ensure the possibility of having a better economical condition.

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