All-out Trade War
An all-out trade war usually ends up hurting almost everyone in a given economy, even those segments the politicians say they are trying to help.
1. 2018 U.S. instigated trade war
Farmers and workers in the American Midwest were shocked to see that China and other countries retaliated to the opening salvos of the 2018 U.S instigated trade war by massively increasing tariffs of their own on American wheat, soybeans, and a variety of other goods produced in the Midwest, including Harley-Davidson motorcycles.
2. 1929 stock market crash massive trade barriers
The U.S. put up massive trade barriers after the stock market crash of 1929. It led to a serious decline in economic activity and the loss of millions of American jobs when the rest of the world responded in kind. The result was a worldwide depression.
The goal of free trade
The goal of free trade is ostensibly to provide a level playing field, permitting individuals and companies to have the opportunity to sell their goods and services in foreign lands.
In theory, when every country in the world is allowed to do what it does best, the world economy prospers, and almost everyone is better off.
In general, trade increase income and with access to imports, companies and consumers have more of a choice about what to do with their increased income.
But what happens when one country imports more than it exports, leading to job losses?
Is the answer simply to close off the country to trade?