Trade Wars or Territorial Wars - The next global battle
Trade Wars or Territorial Wars - The Next Global Battle The traditional understanding about the term “WAR” is that it involves a situation where there is state of armed conflict between states, government, societies and informal paramilitary groups such as mercenaries, insurgents and militants. It is generally characterized by extreme violence, aggression, destruction and mortality, using regular or irregular military forces. However, the same is only a typical understanding about war and is not conclusive understanding. War is a state of fight for some cause. This statement would trigger your mind that we all face a war daily. You are absolutely correct. The war against time management, war against work-life balance, war against need and greed and many other types of wars each one of us face. But we don’t adopt extreme measures unless it seems to excruciate us. Exactly same is the situations when it comes to nationwide political and economic situations. A state faces difficulties on a day-to-day basis. It has its own way of handling difficulties based upon the leaders of the state. However, when extreme situations arrive, it needs to adopt strict measures to protect its integrity. This at its ultimate peak results into war situations to arise. Scope of this essay: Meaning of Trade Wars and Territorial Wars Past instances and reasons for Trade Wars and Territorial Wars Current political and economic situations The next global battle – reasons for occurrence, sight of war and its impact Political and Economic situations post war 1
Meaning of Trade Wars and Territorial Wars: Trade War 1 A trade war is an economic conflict resulting from extreme protectionism in which states raise or create tariffs or other trade barriers against each other in response to trade barriers created by the other party. Increased protection causes both nations' output compositions to move towards their autarky position. Basically, in simple words, any situation where the trade between two geographical locations is restricted or intended to be reduced by pricing strategies because of economic or political conflicts between the controllers or governing bodies of the two geographical location amounts to a trade war. Trade war can take various colours which includes increase in import tariffs rates to its lowest grade and can extend upto complete boycott in the most extreme scenario. The intention of trade wars is to affect the economic conditions of the other party by effecting the export revenue of the other party in case the former party is other party’s major customer and effect considerably the production capacity of the other party if the other party is dependent for raw materials of its major industry on the former party. The trade wars even if cold wars, it is capable of causing a kind of devastation which can definitely disrupt the stability of the biggest nations. Territorial War Territorial war means territorial dispute which is a disagreement over the possession / control of land between two or more territorial entities or over the possession or control of land, usually between a new state and the occupying power. Territorial disputes are often related to the possession of natural resources such as rivers, fertile farmland, mineral or oil resources although the disputes can also be driven by culture, religion and ethnic nationalism. 1 https://en.wikipedia.org/wiki/Trade_war 2
Unlike the trade wars, territorial wars are undertaken to show the physical strengths of one party by overshadowing the other. Also, it is pertinent to note that apart from the physical strengths, it is also the economic strengths which plays a crucial factor for playing territorial wars since the immediate effects of these wars include disruption of trade and incurring huge expenditure which disrupts the economy of the country. Hence the economic capacity of the parties to hold on to the war conditions is a very important factor in territorial wars. Traditionally this capacity was measured in terms of the number of soldiers the kings had along with the food and necessity stock present with the kingdom. In the recent times, this level of ability to keep patience during wars has been measured by the artilleries possessed by the country and the level of dependence upon imports of the country. Past instances and reasons for Trade Wars and Territorial Wars: Trade Wars Anglo-Dutch Wars (2 nd half of 17 th Century) 2 The English and the Dutch were both participants in the Wars of Religion between the Catholic Habsburg Dynasty and the opposing Protestant states. At the same time, as the Age of Exploration dawned, the Dutch and English — influenced by mercantilism and linked by centuries of interaction with each other over fisheries, the textile industry and trade in the Baltic — both sought profits in the New World. Opium Wars (mid-19th century) 3 The Opium Wars were two wars involving China and the British Empire over the British trade of opium and China's sovereignty. The clashes included the First Opium War (1839 – 1842) and the Second Opium War (1856 – 1860). The wars and events between them weakened the Qing dynasty and forced China to trade with the other parts of the world. 2 http://www.contemplator.com/history/dutchwar.html 3 http://www.druglibrary.org/schaffer/heroin/opiwar1.htm 3
Banana Wars (1898-1934) 4 The Banana Wars began with injustices, corruption, lawless societies and labor abuse in Latin America. Banana workers began what was comparable to a civil rights movement in the tropical fruit trade. Warring tropical countries stemmed from maltreatment and abusive working conditions gave rise to one of the earliest and most militant labor movements in early Latin America. When high import duties on bananas were announced in 1913, consumer representatives together with the banana industry protested successfully. They claimed it was the most widely consumed fruit among the urban poor, thus contrasting it with the aristocratic traditions associated with the consumption of other tropical commodities such as tea, coffee, and chocolate. The discourse and corruption facing Latin American people and governments is what prompted the United States influence. Smoot – Hawley Tariff Act (1930) 5 The Tariff Act of 1930, commonly known as the Smoot – Hawley Tariff or Hawley – Smoot Tariff, was an Act implementing protectionist trade policies sponsored by Senator Reed Smoot and Representative Willis C. Hawley and was signed into law on June 17, 1930. The act raised U.S. tariffs on over 20,000 imported goods. The tariffs under the act were the second-highest in the United States in 100 years, exceeded by a small margin by the Tariff of 1828. The Act and following retaliatory tariffs by America's trading partners were major factors of the reduction of American exports and imports by more than half during the Depression. Although economists disagree by how much, the consensus view among economists and economic historians is that "The passage of the Smoot – Hawley Tariff exacerbated the Great Depression." Anglo-Irish Trade War (1932 – 1938) 6 The Anglo-Irish Trade War (also called the Economic War) was a retaliatory trade war between the Irish Free State and the United Kingdom from 1932 to 1938. The Irish 4 Langley, Lester D. (1983). The Banana Wars: United States Intervention in the Caribbean, 1898 – 1934 5 https://www.economist.com/christmas-specials/2008/12/18/the-battle-of-smoot-hawley 6 https://en.wikipedia.org/wiki/Anglo-Irish_Trade_War 4
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