What is a Trade War, and why does it happen? A trade war is an economic dispute between two countries. It can occur when one country retaliates against another's perceived unfair trading practices with restrictions, such as tariffs, on imports. Domestic trade unions or industry lobbyists can pressure politicians to make imported goods less attractive to consumers, pushing international policy toward a trade war. Also, trade wars are often a result of a misunderstanding of the widespread benefits of free trade. Trade wars are usually considered a side effect of protectionism. Protectionism refers to government actions and policies that restrict international trade. A country will generally undertake protectionist actions to shield domestic businesses and jobs from foreign competition. Protectionism is also a method used to balance trade deficits. Effects of a trade war: In an era of global trade, a trade war can become very damaging to the consumers and businesses of both n...