That is no longer a big problem in our networked times as production facilities of numerous corporations are spread all over the planet. At the same time, producers deliver their products worldwide. A boycott or economic sanctions can put a country under stress. It is true that the population mostly suffers as a result, but that is why the initiators still resort to this means. So they want to damage their opponent’s economy. Governments want to achieve their original goal via detours, such as pressure from one’s population.
From Tariffs to Boycotts
The starting point is no different from a classic war. Two conflicting parties argue about a specific topic. Unfortunately, they cannot find a solution peacefully. These can range from high tariffs on the other country’s products to economic boycotts. That locks out the opponent’s products completely, freezes the government’s money and its companies in a certain country as well as prevents economic relations of all kinds. It is essentially about making the other more economically impoverished and thus building up pressure.
Access to measures like this is no longer a significant problem today. The world’s economy is strongly networked. Individual products come from suppliers who are often scattered all over the world. Many companies and countries lend money to one another or work closely together. While this promotes prosperity and lowers prices, it also harbours dangers. These quickly come to bear in economic wars.
All Parties Lose
Then, as in a classic war, the law of the fittest applies. That is mainly the country that has greater economic power. An excellent example of this is the trade war that has flared up repeatedly between the US and China. The government in the east is on the verge of becoming a dominant economic power. The US is therefore doing everything it can to maintain its supremacy. The struggle for consumers has led to numerous customs and trade restrictions again and again in recent years. But so far, neither one nor the other has been able to benefit from this.
History has shown that trade wars are mostly ineffective. In the end, both parties lose. Only when the economy flourishes, prosperity is assured for all. Restrictions or conflicts harm companies, consumers and the states themselves. After all, economic wars lead to unemployment, poverty and product shortages. Therefore, in the past, the means of economic war has seldom proven to be effective.