A trade war, a side effect of protectionism, occurs when country A raises tariffs on country B's imports in retaliation for B raising tariffs on A's imports.
 | | Trade War | A trade war occurs when one country (Country A) raises tariffs (a tax or duty) on another country's (Country B) imports in retaliation for Country B raising tariffs on Country A's imports.
Trade wars are a side effect of protectionism, government actions and policies that restrict international trade, generally with the intent of shielding local businesses and jobs from foreign competition, or of righting trade deficits (a country's imports exceeding its exports). | | Read More » | | Tariff | | A tariff is a tax imposed by one country on the goods and services imported from another country. | | Read More » | | | Protectionism | | Protectionism refers to government actions and policies that restrict or restrain international trade, often with the intent of protecting local businesses and jobs from foreign competition. | | Read More » | | | Trade Deficit | | A trade deficit is not necessarily detrimental, because it often corrects itself over time. However, a trade deficit may lead to fewer jobs. | | Read More » | | |  | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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