Explain disadvantages of a trade war?
Answers
One country can profit greatly from it by exporting, but not importing, goods and services. It can also be used to undercut domestic markets by offering cheaper, but equally valuable goods. There are many advantages and disadvantages of international trade to consider, in all its various forms
Answer: A trade war is distinct from other actions that have detrimental effects on the trading relationship between two countries in that its goals are related specifically to trade. Trade wars are controversial. Trade wars are a side effect of protectionist policies.
A trade war that begins in one sector can grow to affect other sectors.
Disadvantages of a trade war:-
Increases costs and induces inflation
Discourages trade
Slows the economic growth
Hurts diplomatic relations, cultural exchange
Reduces choices and causes marketplace shortages