Year: 2018 | Month: December | Volume 6 | Issue 2
Trade War – A Threat to Multilateral World Trading System under WTO: Recent Trends
DOI:10.30954/2322-0465.2.2018.3
Abstract:
In this paper, we wanted to point out how Trade war begins with nationalist rhetoric and old protectionist slogans to gain National Welfare. We discussed how United States dominated the world trade and initiated most of the Trade wars. We also understood from our study that such type of trade wars are basically damaging to global trading system by harming small countries mostly and bringing no welfare gains for the US. We discussed how US –China trade wars took place and explained these trade wars are the results of domestic protectionist measures of these countries. The US govt. implements high tariff which damages Terms of Trade, Friendly Cooperation between trading nations, and initiates retaliations among trading partners with Nash Equilibrium. At last we can say that from these types of trade conflicts the US govt. though adds sectoral gains in the value added but ultimately gains no welfare for the country itself. In case of US-China trade wars the loss for China are comparatively smaller as compare to other nations. After beginning of any trade wars there exits free riders that can damage many areas of trade and TOT deteriorations can even depends on how retaliations from opposite countries takes place.
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