To be perfectly honest, upon hearing the term Trade Wars, I was a bit apprehensive as to what it actually meant. I still am! From a really simplistic standpoint, all I kept picturing were children sitting around a table at lunchtime, looking at one another’s goods—deciding who was going to trade what for lunch. One boy has a lunchbox full of wonderful goodies—ranging from Oreo cookies to a bag of Cheez Its to a ham and cheese sandwich. Another girl has peanut butter cookies, an apple and extra money to buy something from the cafeteria. A third child—another boy--has a banana, tuna sandwich, and a bottle of grape soda.
Essentially, what happens now is that the boy with the Oreo cookies asks the girl who has the peanut butter cookies if he can have them. Knowing the girl’s background, the Oreo cookie boy knows that the girl’s father packed her lunch this morning. Her father also forgot that she has peanut allergies and cannot eat peanut butter. Therefore, those cookies will not be consumed by her—but could definitely be eaten by someone else! He asks her to trade her cookies. She replies by saying “Yes, I will give you my cookies, but I want your ham and cheese sandwich—because now I don’t have as much to eat.” The boy disagrees and says “Well, you can’t eat your cookies anyways because you are allergic to them. I would really like to have them. You have some money—you can buy a part of my sandwich if you want.”
In the meantime, the other boy in the group offers to give the girl his tuna fish sandwich, in exchange for some of her money. She immediately dismisses the idea, saying that she is not in the mood for tuna. He then says to the boy with the Oreos “Hey, can I have your Oreos since you are taking her peanut butter cookies? I would love something to make my lunch a little better.” The boy with the Oreos says “No way.”
Then both boys say to the girl “You have extra money. You can buy something from either one of us, or even from the cafeteria.” She does not want to spend her money, but rather, save it for a toy she is looking to buy. As a result, all three parties are in a fight (war?) with one another simply because they cannot agree on trading. They all stand up, leave from the table, and sit with other people.
In a way, this is a very elementary (no pun intended!) perspective of looking at trade and trade wars. Albeit from a much smaller scale, each of those children mentioned could serve as a metaphor for different countries and their policies. When looking from one angle, the girl with the peanut allergies could be the United States—as she was not going to eat the cookies, why not exchange them with someone else? This can easily parallel the Chinese chicken feet (Ramzy, 2010). Those feet are lefotvers that the US chicken farmers do not plan on using (unless it is for feed). If someone else can find a better use for it, why not? Furthermore, she has extra money to buy something from the cafeteria, but she wants to save it to buy something else. This could be an example as a protectionist policy. She is not trading or exchanging it with an outside source anytime soon.
The boy with the Oreos could be a representation of China. After all, since the United States cannot eat its peanut butter cookies, what good would those cookies do for them? China is happy to trade a bit of its tire manufacturing (Andrews, 2009)—even with influence by the United Statesfor a little more money from the United States. However, the US wants to save its jobs (and money), so it doesn’t want to do that.
The other boy with the tuna fish sandwich represents a conglomeration of developing nations. Those nations that want to participate in trade and be a part of trading agreements—but are dismissed because some of the other industrial nations are not interested in what they have to offer.
I believe I am still slightly confused as to what the trade wars are. Nevertheless, I am going to keep trying to understand! Essentially, from what I am able to infer, nations keep hiking up their trade tariffs. These tariff increases are directly correlated with the retaliatory measures set by a nation who believes its trading partner is being unfair. Be it through dumping (or what is perceived as dumping) or other such action, a trade war is further instigated by those actions. The only way ‘peace’ could come about is if there was a fair agreement amongst both parties. What policies could be enacted to make that happen?
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