Trade wars among countries are not uncommon: Country A may decide to increase the tariffs it places on some of Country B's products to discourage their importation. When the tariff on a product increases, its price automatically increases, thereby making it unaffordable for the citizens of the country that hikes the tariff. Mildly, a country may utilize this process to protect some local industries that may be affected by the importation of related products from other countries.
How a trade war can affect you
However, a trade war may be ignited when nations overtly become protectionistic in their international trade relations.
The products from some countries will be heavily taxed and made to be too expensive for users/consumers in the others. The current spat between the United States and Mexico, the expected tense trade discussions between China and the U.S., and the possible blanket ban on British products once Britain eventually exits the Europe Union may lead to a disastrous trade war! When this happens, here are how ordinary people and businesses can be affected:
- Scarcity of raw materials for the local industries that depend on foreign resources
- Scarcity of some finished products in the market; for examples, pharmaceutical, IT, educational, and electronics products
- Inflation, due to an unprecedented hike in the prices of consumables
- Famine and lack of proper healthcare technologies and products
The list of the negative impacts of a global trade war is endless.
But the most important thing is how those who are affected can protect themselves from the fallouts from a global trade war.
Four techniques for surviving a global trade war
These four survival techniques will help anyone wade through some uncomfortable consequences of a global trade war:
- Change in lifestyle: When some necessities you depended on suddenly became too expensive to obtain, it's time for you to embrace a new lifestyle.
- Finding a new source: If you are running a business that depends on importing raw materials from overseas, you may need to find a new source for your resources to stay in business.
- Creating new opportunities: Placing tariffs on some foreign products may also create new opportunities for local business owners to get busy and make those products.
- Savings: It's a great move having some savings to spend during an unexpected hike in products' prices.
