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A trade war is an economic conflict where nations impose tariffs or other trade barriers on each other in retaliation for similar actions.

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Additional insights we found via Investopedia

  1. The US-China trade war during President Donald Trump's first administration is one example, whereas the 2026 trade war between the US and Canada is a more recent instance of a trade war.

  2. While tariffs aim to protect domestic industries, they can lead to higher prices for consumers and strained international relations.

  3. During the Great Depression, the Smoot-Hawley Tariff Act of 1930 was passed to revive domestic industry, raising taxes on roughly 25% of all imported goods. However, most historians and economists agree that the resulting trade war exacerbated the global economic crisis.

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