Trade War

Trade War

Trade war is a protectionist policy to restrict international trade when one country (Country X) raises tariff rates on imports from another country (Country Y) in cross-retaliation to Country Y raising tariffs on imports from Country X. A tariff is a tax imposed on imported goods and services. Trade wars occur when one country perceives another country's trading practices to be unfair or when it attempts to protect its domestic industry and create jobs. Governments also use the trade war policy to curb its trade deficit with another particular trading country.