WHAT IS AN EXAMPLE OF A TRADE WAR?
One of the best known—and most harmful—trade wars resulted from the Smoot-Hawley Act of 1930. CNN Moneydescribed what happened. “In 1930, Congress slapped tariffs on all countries that shipped goods to America in an effort to shield U.S. workers. It was called the Smoot-Hawley Act, named after two Republican Congressmen, Reed Smoot and Willis Hawley. And it is widely accepted that it made the Great Depression worse than it would have been… European countries, such as Spain, Italy and Switzerland, retaliated with tariffs of their own, and a trade war began… In total, the volume of U.S. imports fell 40% in the two years following Smoot-Hawley, which became law in June 1930” (Gillespie, Patrick, “Remember Smoot-Hawley: America’s last trade war worsened the Great Depression,” money.cnn.com, July 7, 2016).
Legislation intended to help American workers ended up reducing production and jobs in the U.S., instead. Trade war, like all war, has many victims, and the ones impacted the most are often the least able to bear it.
Trade wars can have winners and losers. But often, all sides lose, as participating countries suffer lower economic activity and employment.
HOW CAN GOVERNMENTS AVOID THEM FOR NOW?
For the time being, trade agreements between countries are very helpful in avoiding trade wars. Governments negotiate agreements on what trade practices are fair and what trade barriers should be removed. To do this, each country participating in the agreement must give the other countries access to its domestic market on terms that are acceptable to their own constituencies at home. That can be a difficult process, but if done properly, it increases economic activity in each country involved.
The Bible has an even better explanation for the problem of trade war and how to solve it. The Apostle James wrote, “Where do wars and fights come from among you? Do they not come from your desires for pleasure that war in your members? You lust and do not have. You murder and covet and cannot obtain. You fight and war. Yet you do not have because you do not ask. You ask and do not receive, because you ask amiss, that you may spend it on your pleasures” (James 4:1–3).
Consider what the Apostle Paul wrote to the Church in Philippi. “Let each of you look out not only for his own interests, but also for the interests of others” (Philippians 2:4). That would certainly produce a favorable change in trade relations everywhere if nations obeyed it—but that is not likely to happen in today’s world.
There is bad news and good news about this situation. The bad news is that human nature has not changed, and prophecy speaks of conflicts between nations getting far worse before they ever get better (Revelation 6:3–4). The good news is that the Prince of Peace, Jesus Christ, is returning to set up a righteous government, and He will prevent all wars among nations in the future. That is the good news—the gospel—of the Kingdom of God. The prophet, Isaiah, recorded what Christ will do. “He shall judge between the nations, and rebuke many people; they shall beat their swords into plowshares, and their spears into pruning hooks; nation shall not lift up sword against nation, neither shall they learn war anymore” (Isaiah 2:4). We can expect that promise will include trade war as well.
Article Appeared @https://www.tomorrowsworld.org/magazines/2017/may-june/trade-war