August 21, 2025

In the age of globalization, where economies are more interconnected than ever, the term tariff war has become a buzzword in international politics and economics. But what exactly is a tariff war, and why do countries engage in it? Let’s uncover this complex phenomenon and explore its causes. Let’s understand the word ‘tariff’. What Is a Tariff War? Key Characteristics: Generally, one country starts a tariff war to fulfil a political agenda. These agendas could be – To trap another country For example, the USA wants to trap India in a ‘divided minds’ situation. The USA says that if India buys oil from Russia, the USA will impose a 50% tariff. Here is a trap for India. Friendship with Russia is centuries old. But the trade with the USA is equally crucial for India. India’s self-interest is also prominent. To curb the dominance, influence, and superiority The most prominent example in recent history is the U.S.-China trade war, which began in 2018. The US imposed tariffs on hundreds of billions of dollars’ worth of Chinese goods, prompting China to retaliate with its tariffs on American exports. The USA is doing this to reduce Chinese dominance, influence, and superiority in Asia and globally. To eradicate/control/reduce dictatorship Complete sanctions are generally the only answer to a dictatorship. Such dictatorships are in North Korea, Iran, Venezuela, and in some African and Middle Eastern countries. Avoiding Entry to the local market To protect the local market and the business of the local sellers and manufacturers. Generally, the above statement acts as a label of tariff war, but it may not always be the real reason. So, if any country says that it has imposed tariffs because it wants to protect its local markets and market participants, then it is up to us to accept it or not. It is up to us to understand the reasons behind it. No country will open its agenda for the obvious reasons. Reduce the debt Burden Sometimes, the agenda behind the tariff war is to reduce the country’s debt. The USA is probably trying to play the same game. The USA has nearly $46 trillion in loans, and they may be trying to get rid of them, but how? Tariffs may bring money to the treasury. It will discourage people from buying the imported products, only to stop the outflow of money. If domestic production increases due to a rise in domestic consumption, it may lead to higher employment. Ultimately, it will bring more taxes through the income of the people. Rising income may increase demand for domestic products. This cycle may work effectively. Leap-Frogging Wish to become dominant in every aspect. Fear Factor Fear of losing number one position, top market share, revenue, importance, global presence, global dominance, prestige, dread, etc. The tariff war between the USA and China falls under this category. America has a fear of losing its number one position, importance, dread, and control in the Asian region, etc. Forcing someone to do something The USA wants to put a tariff on India because it wants India to stop buying crude oil from Russia. The US thinks that India is fueling the Russia-Ukraine war. But Western countries and Western media are deliberately hiding the fact that they have directly provided weapons to Ukraine to sustain the war. Meaning, they want the war to continue, but they don’t want India to support the war (which India isn’t anyway supporting). India has nothing to do with the Russia-Ukraine war; still, the USA wants India to pull into that. Somewhere, the deep agenda looks to break the friendship between Russia and India. This agenda is far from reaching the goal. Trade Imbalances When one country imports significantly more than its exports to another, it creates a trade deficit. A trade deficit occurs when your imports exceed your exports. Meaning the income is less than the spending. Countries may use tariffs to reduce imports and correct this imbalance. Example: The US has long had a trade deficit with China. In response, it imposed tariffs on Chinese goods to encourage domestic production and reduce reliance on Chinese imports. Protecting Domestic Industries Governments may impose tariffs to shield local industries from foreign competition, especially if they believe those industries are vital to national security or economic stability. Example: Tariffs on imported steel and aluminum are often justified as necessary to protect domestic manufacturing and defense capabilities. Retaliation Against Unfair Trade Practices Countries may accuse others of dumping (selling goods below market value), currency manipulation, or providing unfair subsidies. Tariffs become a tool of retaliation. Example: If Country A believes Country B is subsidizing its solar panel industry unfairly, it might impose tariffs to level the playing field. Political Leverage Countries use tariffs as a bargaining chip in broader diplomatic negotiations. They’re not just economic tools—they’re strategic weapons. The government may use such bargaining for any reason it deems fit. Example: A country might impose tariffs to pressure another into changing its environmental policies, labour standards, or intellectual property laws. National Security Concerns Sometimes, tariffs are justified on the grounds of national security. Such ‘security’ is often controversial, as it stretches the definition of what constitutes a security threat. Example: The US has cited national security to justify tariffs on certain tech imports, fearing espionage or data breaches. Real-World Example: The US–China Tariff War One of the most prominent tariff wars in recent history was between the United States and China, beginning in 2018. Timeline Highlights: Outcomes: Consequences of Tariff Wars Please read my blog Effects of the ‘Tariff War’ on the USA Itself – PolyBlogger.com to understand the effects of the tariff war. Though this blog speaks about the impact on America, with little difference, the effects would be the same on every country. Alternatives to Tariff Wars Instead of escalating tariffs, countries can explore more constructive approaches: Conclusion: Navigating the Tariff Terrain Tariff wars are a complex blend of economics, politics, and strategy. While they may seem like