Will This US - Russia Trade War Expand?
US and European government sanctions on Russia began with targeting individuals in the Russian oligarchy. They now include trade items. As a result, the Russians retaliate, first by targeting of individuals and now with trade items.
A term commonly used for this practice of trade restrictions is "Protectionism." Sometimes governments slap tariffs on imports to protect similar goods produced in their own countries. By making the imports more expensive, essentially out of the reach of most consumers, the theory is that the consumer will turn to the locally produced goods. While the recent restrictions imposed by the U.S., European and Russian governments were not imposed to protect local markets, but were rather used to "punish" each other in the growing dispute between the Russian government and many Western governments, the effect doesn't change. It slows economic activity.
Add to this that fact that Italy has now slipped back into recession - for the third time since 2008 - a possible harbinger of recession returning to more of the EU countries - and the impact of the slowing of economic activity by trade restrictions has an even greater impact.
The point here is that Trade Wars, like hot wars, may have different causes, and may begin for different reasons, but in the end they become wars. War in all its forms, once begun, is notoriously hard to control, never mind stop.
The Protectionism that exacerbated the Great Depression may have begun as an attempt to help local economies recover from depressed economic activity resulted in increased depression. The trade sanctions imposed as punitive measures by various governments may result in equally severe results if left to run their course.
More...
Russia slapped import bans on an array of food goods from the U.S. and Europe and threatened to target the automotive, shipping and aerospace industries, striking back at sanctions over the conflict in Ukraine.As the Great Depression began taking a choke hold on nations around the world during the 1920s and 1930s, one of the measures taken by governments was the imposition of trade restrictions. Many think that the increased trade restrictions taken as the Depression deepened served to further slow economic activity, and was therefore one of the key causes of turning a depression into what we now call the "Great" Depression.
A term commonly used for this practice of trade restrictions is "Protectionism." Sometimes governments slap tariffs on imports to protect similar goods produced in their own countries. By making the imports more expensive, essentially out of the reach of most consumers, the theory is that the consumer will turn to the locally produced goods. While the recent restrictions imposed by the U.S., European and Russian governments were not imposed to protect local markets, but were rather used to "punish" each other in the growing dispute between the Russian government and many Western governments, the effect doesn't change. It slows economic activity.
Add to this that fact that Italy has now slipped back into recession - for the third time since 2008 - a possible harbinger of recession returning to more of the EU countries - and the impact of the slowing of economic activity by trade restrictions has an even greater impact.
The point here is that Trade Wars, like hot wars, may have different causes, and may begin for different reasons, but in the end they become wars. War in all its forms, once begun, is notoriously hard to control, never mind stop.
The Protectionism that exacerbated the Great Depression may have begun as an attempt to help local economies recover from depressed economic activity resulted in increased depression. The trade sanctions imposed as punitive measures by various governments may result in equally severe results if left to run their course.
More...
Comments