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Raw Queries and Responses

1. Shard Calculation

Query:

Response:

Calculated Shard: 148 (from laksa198)

2. Crawled Status Check

Query:

curl -X POST \
  'http://laksa148.int.ahrefs:8124/' \
  -H 'Content-Type: text/plain' \
  -H 'X-ClickHouse-Database: crawler3' \
  -H 'Authorization: Basic YXBpOg==' \
  -d 'SELECT getAhrefsURLFromUnparsed(src_unparsed) AS found_url, ifNull(toUnixTimestamp(download_stamp), 0) AS crawl_time, ifNull(toUnixTimestamp(props_url_first_seen), 0) AS first_indexed_time, download_http_code AS http_code, src_unparsed AS src_unparsed, src_root_hash AS src_root_hash, history_drop_reason AS history_drop_reason, meta_title AS meta_title, meta_descriptions AS meta_descriptions, attrs_boilerpipe_text AS attrs_boilerpipe_text, attrs_markdown AS attrs_markdown, attrs_readable_markdown AS attrs_readable_markdown, meta_canonical AS meta_canonical FROM crawler3.page_info_local FINAL PREWHERE (src_root_hash, src_unparsed) IN ((getAhrefsRootHashFromUnparsed(getAhrefsUnparsedNoserviceFromURL(\'https://www.investopedia.com/terms/t/tariff-war.asp\')), getAhrefsUnparsedNoserviceFromURL(\'https://www.investopedia.com/terms/t/tariff-war.asp\'))) FORMAT JSONEachRow'

Response:

{"found_url":"https:\/\/www.investopedia.com\/terms\/t\/tariff-war.asp","crawl_time":1775719835,"first_indexed_time":1510702455,"http_code":200,"src_unparsed":"com,investopedia!www,\/terms\/t\/tariff-war.asp s443","src_root_hash":"7273739457760125548","history_drop_reason":null,"meta_title":"Tariff War: What It Means, Effect, and History","meta_descriptions":["A tariff war is an economic battle between countries where they levy additional taxes on each other's exports."],"attrs_boilerpipe_text":"What Is a Tariff War?\nA tariff war is an economic conflict in which each country levies an additional tax on the other's\nexports\n. Tariff wars generally start when the leadership of one country is unhappy with a trade partner's trading behavior or for geopolitical reasons.\nKey Takeaways\nA tariff war is an economic battle between countries where they levy additional taxes on each other's exports.\nA tariff war is designed to hurt other countries economically, as tariffs discourage the citizens of the importing country from buying the exporting country's product by raising the total cost of those products.\nHistorically, tariff wars are mutually destructive over the long run, though they might offer some short-term benefits.\nUnderstanding Tariff Wars\nIn a tariff war, one country raises tax rates on another's exports. The recipient of the first country's taxation then raises taxes on its exports in retaliation. The increased tax rate is designed to hurt other countries economically, as\ntariffs\ndiscourage the citizens of the importing country from buying the exporting country's products by raising the total cost of those products.\nOne country may incite a tariff war because it is unhappy with one of its trading partners’ political decisions. By putting enough economic pressure on the country, it hopes to force a change in the opposing government’s behavior. This type of tariff war is also known as a customs war.\nThe Effect of Tariff Wars\nTariff wars often have unintended consequences and tend to negatively affect businesses and consumers on each side. For example, China is one of the world's largest (if not the largest) soybean\nimporters\n, and the U.S. is one of the largest soybean exporters. In response to the U.S. tariffs, China placed a 25% tariff on soybeans from the U.S.\nBrazil, another large soybean exporter, also exports to China. There was no tariff on Brazil's soybean exports, so it naturally experienced an increase in soybean exports to China. This drop in demand for U.S. soybeans caused farmers to end up with more than 3.7 billion bushels of soybeans in storage in 2018.\nSoybean sale losses were so high that the U.S. government compensated soybean—and other commodity—farmers to the tune of billions of dollars.\nThe Chinese, in turn, had to pay more for soybeans because demand remained the same. Brazil's soybean prices increased by $0.97 per bushel. Chinese soybean imports from Brazil increased to compensate for the supply change; however, because Brazilian soybean prices increased, China ended up paying about the same for soybeans as it would have if it imported from the U.S. and paid the tariffs.\nThe retaliatory tariff ended up hurting Chinese businesses and consumers anyway.\nOther issues arise when tariff wars occur. Supply chains are affected, and real exports and GDP decline. Companies might be forced to hire fewer employees, and\ncapital losses\ncould be significant. In 2020, the Federal Reserve found that the trade war with China had cost U.S. firms $1.7 trillion in market capitalization.\nHistory of Tariff Wars\nThe U.S. didn't impose high tariffs on trading partners until the 1920s and early 1930s. Tariffs in that era contributed to an overall decline in world trade of about 66% between 1929 and 1934.\nThe\nSmoot-Hawley Tariff Act\nof 1930 is generally credited with seriously exacerbating the\nGreat Depression\n, leading to the election of President Franklin D. Roosevelt, who, in 1934, signed the Reciprocal Trade Agreements Act that reduced tariff levels and liberalized trade with foreign governments.\nRecent Trade Wars\nDonald Trump was one of the few presidential candidates to speak about trade inequalities and tariffs in 2016. He vowed to take a tough line against international trading partners, especially China, to help American blue-collar workers displaced by what he described as unfair trade practices.\nWhen he took office in 2017, his administration first targeted solar panels and washing machines from China. In March 2018, tariffs of 25% were added to imported steel and 10% on imported aluminum.\nIn early 2025, Trump imposed a 10% tariff on all Chinese imports.\nTariffs on China\nSeveral countries were exempted, but Trump announced that the U.S. government would apply tariffs on $50 billion worth of Chinese imports in 2018.\nThat led to back-and-forth tariff announcements as the Chinese government retaliated in early April 2018 with a 15% or 25% tariff on imports from the U.S. that included 94 different U.S. foods and agricultural tariff lines.\nIn response, President Trump added $100 billion worth of Chinese products to the list.\nTrump promised more to come on Oct. 1, 2019, though he delayed some of those new tariffs until Dec. 15, 2019, to avoid hurting the Christmas shopping season.\nAs a result of the tariff war, the manufacturing sector of the American economy saw factory output drop, tipping it into a\nrecession\n.\nImportant\nTariffs hurt American farmers so much that President Trump, in collaboration with Congress, had to give them $28 billion in subsidies to ease their economic suffering.\nIn the trade agreement commonly referred to as the U.S-China Economic and Trade Agreement (Phase One), China agreed to increase its purchase of certain U.S. goods and services by $200 billion through December 2021. However, China only imported 58% of the promised goods and services.\nTrump\nwasted little time\nduring his second presidential term to impose new tariffs. An additional 10% tariff took effect on all Chinese goods on Feb. 4, 2025. China quickly announced retaliatory tariffs on select American imports, including 15% duties on coal and liquefied natural gas products and a 10% tariff on crude oil, agricultural machinery, and large-engine cars.\nTrump plans to implement a 25% tariff on goods from Mexico and Canada, but it's currently delayed following negotiations.\nTrump-Era Tariffs Extended\nIn 2022, then President Joe Biden extended Trump-era tariffs on solar panels and cells. However, a few months later, he declared an emergency regarding electrical services and temporarily suspended tariffs on specific solar cells and modules from Cambodia, Thailand, Vietnam, and Malaysia.\nWhat Are the 3 Main Effects of Tariffs?\nTariffs raise the cost of imported goods, leading to higher consumer prices. They also make foreign goods more expensive, reducing imports. A targeted country is likely to impose its own tariffs in response, further escalating the conflict.\nWhen Did the Trade War Start?\nThe most recent\ntrade war\nbetween the U.S. and China began in 2018 when the U.S. imposed tariffs on a wide range of Chinese products, and China responded with its own tariffs on U.S. goods.\nThe Bottom Line\nTariff wars, such as the recent U.S.-China trade conflict, are economic battles where\ncountries impose taxes\non each other’s exports. While they aim to address unfair trade practices or political disagreements, these wars often lead to higher consumer prices,\nsupply chain\ndisruptions, and\nlong-term economic damage\nfor both parties. Though some short-term benefits might occur, the overall impact on global trade, businesses, and consumers tends to be negative, as historical examples have shown.","attrs_markdown":"\n\n[Skip to content](https:\/\/www.investopedia.com\/terms\/t\/tariff-war.asp#main)\n\n[Investopedia](https:\/\/www.investopedia.com\/)\n\n[Trade](https:\/\/www.investopedia.com\/simulator\/?inv_to_sim=global_nav)\n\n- Please fill out this field.\n- [Newsletters](https:\/\/www.investopedia.com\/terms\/t\/tariff-war.asp)\n\nPlease fill out this field.\n\n- [News](https:\/\/www.investopedia.com\/news-4427706)\n  News\n  \n  - [Markets](https:\/\/www.investopedia.com\/markets-news-4427704)\n  - [Companies](https:\/\/www.investopedia.com\/company-news-4427705)\n  - [Earnings](https:\/\/www.investopedia.com\/earnings-reports-5218419)\n  - [CD Rates](https:\/\/www.investopedia.com\/certificates-deposit-news-7111770)\n  - [Mortgage Rates](https:\/\/www.investopedia.com\/mortgage-rates-5184598)\n  - [Economy](https:\/\/www.investopedia.com\/economic-news-5218422)\n  - 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[Best Mortgage Rates](https:\/\/www.investopedia.com\/mortgage-rates-5094943)\n  - [Best Robo-Advisors](https:\/\/www.investopedia.com\/the-best-robo-advisors-8764849)\n  - [Best Personal Loans](https:\/\/www.investopedia.com\/the-best-personal-loans-8761582)\n  - [Best Debt Relief Companies](https:\/\/www.investopedia.com\/the-best-debt-relief-companies-8763179)\n  - [View All](https:\/\/www.investopedia.com\/financial-product-reviews-7110783)\n\n- Top Stories\n- [Could the Healthiest Countries Be the Perfect Retirement Spots?](https:\/\/www.investopedia.com\/could-the-world-s-healthiest-countries-be-perfect-spots-to-retire-11945240)\n- [Warren Buffett's Timeless Wisdom on Investing Pitfalls](https:\/\/www.investopedia.com\/timeless-wisdom-from-buffett-how-to-avoid-common-investment-pitfalls-11945227)\n- [How ChatGPT Can Help with Retirement Planning](https:\/\/www.investopedia.com\/chatgpt-can-help-with-retirement-planning-but-experts-say-it-has-limits-11945243)\n- [Why Is Inflation So Stubbornly High? Blame the Stock Market](https:\/\/www.investopedia.com\/why-is-inflation-so-stubbornly-high-blame-the-stock-market-11944367)\n\nTable of Contents\n\nExpand\n\nTable of Contents\n\n- [What Is a Tariff War?](https:\/\/www.investopedia.com\/terms\/t\/tariff-war.asp#toc-what-is-a-tariff-war)\n- [Understanding Tariff Wars](https:\/\/www.investopedia.com\/terms\/t\/tariff-war.asp#toc-understanding-tariff-wars)\n- [Consequences](https:\/\/www.investopedia.com\/terms\/t\/tariff-war.asp#toc-the-effect-of-tariff-wars)\n- [History](https:\/\/www.investopedia.com\/terms\/t\/tariff-war.asp#toc-history-of-tariff-wars)\n- [Recent Trade Wars](https:\/\/www.investopedia.com\/terms\/t\/tariff-war.asp#toc-recent-trade-wars)\n- [FAQs](https:\/\/www.investopedia.com\/terms\/t\/tariff-war.asp#toc-do-tariffs-create-trade-wars)\n- [The Bottom Line](https:\/\/www.investopedia.com\/terms\/t\/tariff-war.asp#toc-the-bottom-line)\n\n# Tariff War: What It Means, Effect, and History\nBy\n\n[Will Kenton](https:\/\/www.investopedia.com\/contributors\/53661\/)\n\n![]()\n\n![](https:\/\/www.investopedia.com\/thmb\/1--VSF1cFb3rrNpnZO9ki0pmD8I=\/200x200\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/wk_headshot_aug_2018_02__william_kenton-5bfc261446e0fb005118afc9.jpg)\n\n[Full Bio](https:\/\/www.investopedia.com\/contributors\/53661\/)\n\nWill Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School for Social Research and Doctor of Philosophy in English literature from NYU.\n\nLearn about our  [editorial policies](https:\/\/www.investopedia.com\/legal-4768893#editorial-policy)\n\nUpdated February 10, 2025\n\nFact checked by\n\n[Yarilet Perez](https:\/\/www.investopedia.com\/yarilet-perez-5078533)\n\n![Yarilet Perez]()\n\n![Yarilet Perez](https:\/\/www.investopedia.com\/thmb\/cEF2qOX7iOQUm6i7wsIW7l6w0qo=\/200x200\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/YariletPerez-d2289cb01c3c4f2aabf79ce6057e5078.jpg)\n\nFact checked by Yarilet Perez\n\n[Full Bio](https:\/\/www.investopedia.com\/yarilet-perez-5078533)\n\nYarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.\n\nLearn about our  [editorial policies](https:\/\/www.investopedia.com\/legal-4768893#editorial-policy)\n\n![Crane lifting up container in yard full of containers. ](https:\/\/www.investopedia.com\/thmb\/UcpqPZVMnKFoSHDP_oVl2c7hEDE=\/1500x0\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-997042320-fd83518712464e089f2653c6cb33a605.jpg)\n\n![Crane lifting up container in yard full of containers. ](https:\/\/www.investopedia.com\/thmb\/UcpqPZVMnKFoSHDP_oVl2c7hEDE=\/1500x0\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/GettyImages-997042320-fd83518712464e089f2653c6cb33a605.jpg)\n\nSasin Tipchai \/ Getty Images\n\nClose\n\n## What Is a Tariff War?\nA tariff war is an economic conflict in which each country levies an additional tax on the other's [exports](https:\/\/www.investopedia.com\/terms\/e\/export.asp). Tariff wars generally start when the leadership of one country is unhappy with a trade partner's trading behavior or for geopolitical reasons.\n\n### Key Takeaways\n- A tariff war is an economic battle between countries where they levy additional taxes on each other's exports.\n- A tariff war is designed to hurt other countries economically, as tariffs discourage the citizens of the importing country from buying the exporting country's product by raising the total cost of those products.\n- Historically, tariff wars are mutually destructive over the long run, though they might offer some short-term benefits.\n## Understanding Tariff Wars\nIn a tariff war, one country raises tax rates on another's exports. The recipient of the first country's taxation then raises taxes on its exports in retaliation. The increased tax rate is designed to hurt other countries economically, as [tariffs](https:\/\/www.investopedia.com\/terms\/t\/tariff.asp) discourage the citizens of the importing country from buying the exporting country's products by raising the total cost of those products.\n\nOne country may incite a tariff war because it is unhappy with one of its trading partners’ political decisions. By putting enough economic pressure on the country, it hopes to force a change in the opposing government’s behavior. This type of tariff war is also known as a customs war.\n\n## The Effect of Tariff Wars\nTariff wars often have unintended consequences and tend to negatively affect businesses and consumers on each side. For example, China is one of the world's largest (if not the largest) soybean [importers](https:\/\/www.investopedia.com\/articles\/investing\/100813\/interesting-facts-about-imports-and-exports.asp), and the U.S. is one of the largest soybean exporters. In response to the U.S. tariffs, China placed a 25% tariff on soybeans from the U.S.\n\nBrazil, another large soybean exporter, also exports to China. There was no tariff on Brazil's soybean exports, so it naturally experienced an increase in soybean exports to China. This drop in demand for U.S. soybeans caused farmers to end up with more than 3.7 billion bushels of soybeans in storage in 2018. Soybean sale losses were so high that the U.S. government compensated soybean—and other commodity—farmers to the tune of billions of dollars.\n\nThe Chinese, in turn, had to pay more for soybeans because demand remained the same. Brazil's soybean prices increased by \\$0.97 per bushel. Chinese soybean imports from Brazil increased to compensate for the supply change; however, because Brazilian soybean prices increased, China ended up paying about the same for soybeans as it would have if it imported from the U.S. and paid the tariffs. The retaliatory tariff ended up hurting Chinese businesses and consumers anyway.\n\nOther issues arise when tariff wars occur. Supply chains are affected, and real exports and GDP decline. Companies might be forced to hire fewer employees, and [capital losses](https:\/\/www.investopedia.com\/terms\/c\/capitalloss.asp) could be significant. In 2020, the Federal Reserve found that the trade war with China had cost U.S. firms \\$1.7 trillion in market capitalization.\n\n## History of Tariff Wars\nThe U.S. didn't impose high tariffs on trading partners until the 1920s and early 1930s. Tariffs in that era contributed to an overall decline in world trade of about 66% between 1929 and 1934. The [Smoot-Hawley Tariff Act](https:\/\/www.investopedia.com\/terms\/s\/smoot-hawley-tariff-act.asp) of 1930 is generally credited with seriously exacerbating the [Great Depression](https:\/\/www.investopedia.com\/terms\/g\/great_depression.asp), leading to the election of President Franklin D. Roosevelt, who, in 1934, signed the Reciprocal Trade Agreements Act that reduced tariff levels and liberalized trade with foreign governments.\n\n## Recent Trade Wars\nDonald Trump was one of the few presidential candidates to speak about trade inequalities and tariffs in 2016. He vowed to take a tough line against international trading partners, especially China, to help American blue-collar workers displaced by what he described as unfair trade practices.\n\nWhen he took office in 2017, his administration first targeted solar panels and washing machines from China. In March 2018, tariffs of 25% were added to imported steel and 10% on imported aluminum. In early 2025, Trump imposed a 10% tariff on all Chinese imports.\n\n### Tariffs on China\nSeveral countries were exempted, but Trump announced that the U.S. government would apply tariffs on \\$50 billion worth of Chinese imports in 2018. That led to back-and-forth tariff announcements as the Chinese government retaliated in early April 2018 with a 15% or 25% tariff on imports from the U.S. that included 94 different U.S. foods and agricultural tariff lines. In response, President Trump added \\$100 billion worth of Chinese products to the list.\n\nTrump promised more to come on Oct. 1, 2019, though he delayed some of those new tariffs until Dec. 15, 2019, to avoid hurting the Christmas shopping season. As a result of the tariff war, the manufacturing sector of the American economy saw factory output drop, tipping it into a [recession](https:\/\/www.investopedia.com\/terms\/r\/recession.asp).\n\n### Important\nTariffs hurt American farmers so much that President Trump, in collaboration with Congress, had to give them \\$28 billion in subsidies to ease their economic suffering.\n\nIn the trade agreement commonly referred to as the U.S-China Economic and Trade Agreement (Phase One), China agreed to increase its purchase of certain U.S. goods and services by \\$200 billion through December 2021. However, China only imported 58% of the promised goods and services.\n\nTrump [wasted little time](https:\/\/www.investopedia.com\/what-s-next-in-trump-s-trade-war-8784804) during his second presidential term to impose new tariffs. An additional 10% tariff took effect on all Chinese goods on Feb. 4, 2025. China quickly announced retaliatory tariffs on select American imports, including 15% duties on coal and liquefied natural gas products and a 10% tariff on crude oil, agricultural machinery, and large-engine cars. Trump plans to implement a 25% tariff on goods from Mexico and Canada, but it's currently delayed following negotiations.\n\n### Trump-Era Tariffs Extended\nIn 2022, then President Joe Biden extended Trump-era tariffs on solar panels and cells. However, a few months later, he declared an emergency regarding electrical services and temporarily suspended tariffs on specific solar cells and modules from Cambodia, Thailand, Vietnam, and Malaysia.\n\n## Do Tariffs Create Trade Wars?\n[Imposing tariffs on a trading partner can create a trade war](https:\/\/www.investopedia.com\/buffett-says-trump-tariffs-act-of-war-11689411). This is because the country on the receiving end of the tariff is generally unhappy with the action and imposes its own tariffs on its trade partner.\n\n## What Are the 3 Main Effects of Tariffs?\nTariffs raise the cost of imported goods, leading to higher consumer prices. They also make foreign goods more expensive, reducing imports. A targeted country is likely to impose its own tariffs in response, further escalating the conflict.\n\n## When Did the Trade War Start?\nThe most recent [trade war](https:\/\/www.investopedia.com\/terms\/t\/trade-war.asp) between the U.S. and China began in 2018 when the U.S. imposed tariffs on a wide range of Chinese products, and China responded with its own tariffs on U.S. goods.\n## The Bottom Line\nTariff wars, such as the recent U.S.-China trade conflict, are economic battles where [countries impose taxes](https:\/\/www.investopedia.com\/penguins-and-trumps-tariff-war-11711309) on each other’s exports. While they aim to address unfair trade practices or political disagreements, these wars often lead to higher consumer prices, [supply chain](https:\/\/www.investopedia.com\/terms\/s\/supplychain.asp) disruptions, and [long-term economic damage](https:\/\/www.investopedia.com\/tariffs-and-recent-grads-job-prospects-11759124) for both parties. Though some short-term benefits might occur, the overall impact on global trade, businesses, and consumers tends to be negative, as historical examples have shown.\n\nArticle Sources\n\nInvestopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our [editorial policy.](https:\/\/www.investopedia.com\/legal-4768893#EditorialPolicy)\n\n1. American Farm Bureau Federation. \"[How Much Corn and Soybeans Was in Storage?](https:\/\/www.fb.org\/market-intel\/how-much-corn-and-soybeans-was-in-storage)\"\n2. Council on Foreign Relations. \"[92 Percent of Trump's China Tariff Proceeds Has Gone to Bail Out Angry Farmers](https:\/\/www.cfr.org\/blog\/92-percent-trumps-china-tariff-proceeds-has-gone-bail-out-angry-farmers).\"\n3. AG Data News. \"[How Much Did Soybean Farmers Lose in the Trade War?](https:\/\/agdatanews.substack.com\/p\/how-much-did-soybean-farmers-lose?utm_source=publication-search)\"\n4. Brookings. \"[More Pain Than Gain: How the US-China Trade Hurt America](https:\/\/www.brookings.edu\/blog\/order-from-chaos\/2020\/08\/07\/more-pain-than-gain-how-the-us-china-trade-war-hurt-america\/).\"\n5. Federal Reserve Bank of New York. \"[The Investment Cost of the U.S.-China Trade War](https:\/\/libertystreeteconomics.newyorkfed.org\/2020\/05\/the-investment-cost-of-the-us-china-trade-war\/).\"\n6. U.S. Department of State: Office of the Historian. \"[Protectionism in the Interwar Period](https:\/\/history.state.gov\/milestones\/1921-1936\/protectionism).\"\n7. U.S. Department of State: Office of the Historian. \"[New Deal Trade Policy: The Export-Import Bank & the Reciprocal Trade Agreements Act, 1934](https:\/\/history.state.gov\/milestones\/1921-1936\/export-import-bank).\"\n8. Federal Register. \"[U.S. Department of Commerce Announces Steel and Aluminum Tariff Exclusion Process](https:\/\/www.federalregister.gov\/documents\/2020\/12\/14\/2020-27110\/section-232-steel-and-aluminum-tariff-exclusions-process).\"\n9. Associated Press. \"[A Timeline of US-China Tit-For-Tat Tariffs Since Trump’s First Term](https:\/\/apnews.com\/article\/china-us-tariffs-timeline-trump-xi-08b5d468e61ba15e760563ef0186b2bb).\"\n10. Office of the United States Trade Representative. \"[USTR Issues Tariffs on Chinese Products in Response to Unfair Trade Practices](https:\/\/ustr.gov\/about-us\/policy-offices\/press-office\/press-releases\/2018\/june\/ustr-issues-tariffs-chinese-products).\"\n11. EveryCRSReport: Congressional Research Service. \"[China's Retaliatory Tariffs on U.S. Agriculture: In Brief](https:\/\/www.everycrsreport.com\/reports\/R45929.html).\"\n12. Office of the United States Trade Representative. \"[USTR Robert Lighthizer Statement on the President's Additional Section 301 Action](https:\/\/ustr.gov\/about-us\/policy-offices\/press-office\/press-releases\/2018\/april\/ustr-robert-lighthizer-statement).\"\n13. Peterson Institure for International Economics. \"[US-China Phase One Tracker: China’s Purchases of US Goods](https:\/\/www.piie.com\/research\/piie-charts\/us-china-phase-one-tracker-chinas-purchases-us-goods).\"\n14. Associated Press. \"[Trump’s Tariff Tactics Carry Higher Economic Risks Than During His First Term](https:\/\/apnews.com\/article\/trump-tariffs-trade-inflation-mexico-china-canada-5e0cad1ba2d9ec086ddf8999b0807dff).\"\n15. Associated Press. \"[Fast Fashion, Laptops and Toys Are Likely To Cost More Due to US Tariffs on Chinese Imports](https:\/\/apnews.com\/article\/china-tariffs-trump-shein-temu-023aaee8f043605e62a614eaa5134f62).\"\n16. Peterson Institute for International Economics. \"[Trump’s Trade War Timeline: An Up-to-Date Guide](https:\/\/www.piie.com\/blogs\/trade-and-investment-policy-watch\/trumps-trade-war-timeline-date-guide).\"\n\nRead more\n\n- [Economy](https:\/\/www.investopedia.com\/economy-4689801)\n- [Government & Policy](https:\/\/www.investopedia.com\/government-and-policy-4689793)\n\nPartner Links\n\n## Related Articles\n[![Monopsony: A market dominated by a single buyer.]() ![Monopsony: A market dominated by a single buyer.](https:\/\/www.investopedia.com\/thmb\/6pCdN24i7su9tndi_uqrbFIVbBk=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/monopsony.asp-final-b5584ce2bc8c49a19f26b742abd82b8a.png) Monopsony: Understanding Single-Buyer Market Dynamics](https:\/\/www.investopedia.com\/terms\/m\/monopsony.asp)\n\n[![Students working on laptops in a classroom.]() ![Students working on laptops in a classroom.](https:\/\/www.investopedia.com\/thmb\/7Ijwc1SnRE8qAXuV2GzIGWI-nzg=\/282x188\/filters:no_upscale\$\$:max_bytes\$150000\$:strip_icc\$\$\/students11-8a2ee0e9103e4c3ea36cd76c3b0a2649.jpg) Who Owns Your Student Loan Debt? 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[R](https:\/\/www.investopedia.com\/terms-beginning-with-r-4769368)\n- [S](https:\/\/www.investopedia.com\/terms-beginning-with-s-4769369)\n- [T](https:\/\/www.investopedia.com\/terms-beginning-with-t-4769370)\n- [U](https:\/\/www.investopedia.com\/terms-beginning-with-u-4769371)\n- [V](https:\/\/www.investopedia.com\/terms-beginning-with-v-4769372)\n- [W](https:\/\/www.investopedia.com\/terms-beginning-with-w-4769373)\n- [X](https:\/\/www.investopedia.com\/terms-beginning-with-x-4769374)\n- [Y](https:\/\/www.investopedia.com\/terms-beginning-with-y-4769375)\n- [Z](https:\/\/www.investopedia.com\/terms-beginning-with-z-4769376)\n\nInvestopedia is part of the [People Inc.](https:\/\/www.people.inc\/) publishing family.\n\nNewsletter Sign Up\n\nNewsletter Sign Up","attrs_readable_markdown":"## What Is a Tariff War?\nA tariff war is an economic conflict in which each country levies an additional tax on the other's [exports](https:\/\/www.investopedia.com\/terms\/e\/export.asp). Tariff wars generally start when the leadership of one country is unhappy with a trade partner's trading behavior or for geopolitical reasons.\n\n### Key Takeaways\n- A tariff war is an economic battle between countries where they levy additional taxes on each other's exports.\n- A tariff war is designed to hurt other countries economically, as tariffs discourage the citizens of the importing country from buying the exporting country's product by raising the total cost of those products.\n- Historically, tariff wars are mutually destructive over the long run, though they might offer some short-term benefits.\n## Understanding Tariff Wars\nIn a tariff war, one country raises tax rates on another's exports. The recipient of the first country's taxation then raises taxes on its exports in retaliation. The increased tax rate is designed to hurt other countries economically, as [tariffs](https:\/\/www.investopedia.com\/terms\/t\/tariff.asp) discourage the citizens of the importing country from buying the exporting country's products by raising the total cost of those products.\n\nOne country may incite a tariff war because it is unhappy with one of its trading partners’ political decisions. By putting enough economic pressure on the country, it hopes to force a change in the opposing government’s behavior. This type of tariff war is also known as a customs war.\n\n## The Effect of Tariff Wars\nTariff wars often have unintended consequences and tend to negatively affect businesses and consumers on each side. For example, China is one of the world's largest (if not the largest) soybean [importers](https:\/\/www.investopedia.com\/articles\/investing\/100813\/interesting-facts-about-imports-and-exports.asp), and the U.S. is one of the largest soybean exporters. In response to the U.S. tariffs, China placed a 25% tariff on soybeans from the U.S.\n\nBrazil, another large soybean exporter, also exports to China. There was no tariff on Brazil's soybean exports, so it naturally experienced an increase in soybean exports to China. This drop in demand for U.S. soybeans caused farmers to end up with more than 3.7 billion bushels of soybeans in storage in 2018. Soybean sale losses were so high that the U.S. government compensated soybean—and other commodity—farmers to the tune of billions of dollars.\n\nThe Chinese, in turn, had to pay more for soybeans because demand remained the same. Brazil's soybean prices increased by \\$0.97 per bushel. Chinese soybean imports from Brazil increased to compensate for the supply change; however, because Brazilian soybean prices increased, China ended up paying about the same for soybeans as it would have if it imported from the U.S. and paid the tariffs. The retaliatory tariff ended up hurting Chinese businesses and consumers anyway.\n\nOther issues arise when tariff wars occur. Supply chains are affected, and real exports and GDP decline. Companies might be forced to hire fewer employees, and [capital losses](https:\/\/www.investopedia.com\/terms\/c\/capitalloss.asp) could be significant. In 2020, the Federal Reserve found that the trade war with China had cost U.S. firms \\$1.7 trillion in market capitalization.\n\n## History of Tariff Wars\nThe U.S. didn't impose high tariffs on trading partners until the 1920s and early 1930s. Tariffs in that era contributed to an overall decline in world trade of about 66% between 1929 and 1934. The [Smoot-Hawley Tariff Act](https:\/\/www.investopedia.com\/terms\/s\/smoot-hawley-tariff-act.asp) of 1930 is generally credited with seriously exacerbating the [Great Depression](https:\/\/www.investopedia.com\/terms\/g\/great_depression.asp), leading to the election of President Franklin D. Roosevelt, who, in 1934, signed the Reciprocal Trade Agreements Act that reduced tariff levels and liberalized trade with foreign governments.\n\n## Recent Trade Wars\nDonald Trump was one of the few presidential candidates to speak about trade inequalities and tariffs in 2016. He vowed to take a tough line against international trading partners, especially China, to help American blue-collar workers displaced by what he described as unfair trade practices.\n\nWhen he took office in 2017, his administration first targeted solar panels and washing machines from China. In March 2018, tariffs of 25% were added to imported steel and 10% on imported aluminum. In early 2025, Trump imposed a 10% tariff on all Chinese imports.\n\n### Tariffs on China\nSeveral countries were exempted, but Trump announced that the U.S. government would apply tariffs on \\$50 billion worth of Chinese imports in 2018. That led to back-and-forth tariff announcements as the Chinese government retaliated in early April 2018 with a 15% or 25% tariff on imports from the U.S. that included 94 different U.S. foods and agricultural tariff lines. In response, President Trump added \\$100 billion worth of Chinese products to the list.\n\nTrump promised more to come on Oct. 1, 2019, though he delayed some of those new tariffs until Dec. 15, 2019, to avoid hurting the Christmas shopping season. As a result of the tariff war, the manufacturing sector of the American economy saw factory output drop, tipping it into a [recession](https:\/\/www.investopedia.com\/terms\/r\/recession.asp).\n\n### Important\nTariffs hurt American farmers so much that President Trump, in collaboration with Congress, had to give them \\$28 billion in subsidies to ease their economic suffering.\n\nIn the trade agreement commonly referred to as the U.S-China Economic and Trade Agreement (Phase One), China agreed to increase its purchase of certain U.S. goods and services by \\$200 billion through December 2021. However, China only imported 58% of the promised goods and services.\n\nTrump [wasted little time](https:\/\/www.investopedia.com\/what-s-next-in-trump-s-trade-war-8784804) during his second presidential term to impose new tariffs. An additional 10% tariff took effect on all Chinese goods on Feb. 4, 2025. China quickly announced retaliatory tariffs on select American imports, including 15% duties on coal and liquefied natural gas products and a 10% tariff on crude oil, agricultural machinery, and large-engine cars. Trump plans to implement a 25% tariff on goods from Mexico and Canada, but it's currently delayed following negotiations.\n\n### Trump-Era Tariffs Extended\nIn 2022, then President Joe Biden extended Trump-era tariffs on solar panels and cells. However, a few months later, he declared an emergency regarding electrical services and temporarily suspended tariffs on specific solar cells and modules from Cambodia, Thailand, Vietnam, and Malaysia.\n\n## What Are the 3 Main Effects of Tariffs?\nTariffs raise the cost of imported goods, leading to higher consumer prices. They also make foreign goods more expensive, reducing imports. A targeted country is likely to impose its own tariffs in response, further escalating the conflict.\n\n## When Did the Trade War Start?\nThe most recent [trade war](https:\/\/www.investopedia.com\/terms\/t\/trade-war.asp) between the U.S. and China began in 2018 when the U.S. imposed tariffs on a wide range of Chinese products, and China responded with its own tariffs on U.S. goods.\n## The Bottom Line\nTariff wars, such as the recent U.S.-China trade conflict, are economic battles where [countries impose taxes](https:\/\/www.investopedia.com\/penguins-and-trumps-tariff-war-11711309) on each other’s exports. While they aim to address unfair trade practices or political disagreements, these wars often lead to higher consumer prices, [supply chain](https:\/\/www.investopedia.com\/terms\/s\/supplychain.asp) disruptions, and [long-term economic damage](https:\/\/www.investopedia.com\/tariffs-and-recent-grads-job-prospects-11759124) for both parties. Though some short-term benefits might occur, the overall impact on global trade, businesses, and consumers tends to be negative, as historical examples have shown.","meta_canonical":null}

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Meta Title	Tariff War: What It Means, Effect, and History
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Boilerpipe Text	What Is a Tariff War? A tariff war is an economic conflict in which each country levies an additional tax on the other's exports . Tariff wars generally start when the leadership of one country is unhappy with a trade partner's trading behavior or for geopolitical reasons. Key Takeaways A tariff war is an economic battle between countries where they levy additional taxes on each other's exports. A tariff war is designed to hurt other countries economically, as tariffs discourage the citizens of the importing country from buying the exporting country's product by raising the total cost of those products. Historically, tariff wars are mutually destructive over the long run, though they might offer some short-term benefits. Understanding Tariff Wars In a tariff war, one country raises tax rates on another's exports. The recipient of the first country's taxation then raises taxes on its exports in retaliation. The increased tax rate is designed to hurt other countries economically, as tariffs discourage the citizens of the importing country from buying the exporting country's products by raising the total cost of those products. One country may incite a tariff war because it is unhappy with one of its trading partners’ political decisions. By putting enough economic pressure on the country, it hopes to force a change in the opposing government’s behavior. This type of tariff war is also known as a customs war. The Effect of Tariff Wars Tariff wars often have unintended consequences and tend to negatively affect businesses and consumers on each side. For example, China is one of the world's largest (if not the largest) soybean importers , and the U.S. is one of the largest soybean exporters. In response to the U.S. tariffs, China placed a 25% tariff on soybeans from the U.S. Brazil, another large soybean exporter, also exports to China. There was no tariff on Brazil's soybean exports, so it naturally experienced an increase in soybean exports to China. This drop in demand for U.S. soybeans caused farmers to end up with more than 3.7 billion bushels of soybeans in storage in 2018. Soybean sale losses were so high that the U.S. government compensated soybean—and other commodity—farmers to the tune of billions of dollars. The Chinese, in turn, had to pay more for soybeans because demand remained the same. Brazil's soybean prices increased by $0.97 per bushel. Chinese soybean imports from Brazil increased to compensate for the supply change; however, because Brazilian soybean prices increased, China ended up paying about the same for soybeans as it would have if it imported from the U.S. and paid the tariffs. The retaliatory tariff ended up hurting Chinese businesses and consumers anyway. Other issues arise when tariff wars occur. Supply chains are affected, and real exports and GDP decline. Companies might be forced to hire fewer employees, and capital losses could be significant. In 2020, the Federal Reserve found that the trade war with China had cost U.S. firms $1.7 trillion in market capitalization. History of Tariff Wars The U.S. didn't impose high tariffs on trading partners until the 1920s and early 1930s. Tariffs in that era contributed to an overall decline in world trade of about 66% between 1929 and 1934. The Smoot-Hawley Tariff Act of 1930 is generally credited with seriously exacerbating the Great Depression , leading to the election of President Franklin D. Roosevelt, who, in 1934, signed the Reciprocal Trade Agreements Act that reduced tariff levels and liberalized trade with foreign governments. Recent Trade Wars Donald Trump was one of the few presidential candidates to speak about trade inequalities and tariffs in 2016. He vowed to take a tough line against international trading partners, especially China, to help American blue-collar workers displaced by what he described as unfair trade practices. When he took office in 2017, his administration first targeted solar panels and washing machines from China. In March 2018, tariffs of 25% were added to imported steel and 10% on imported aluminum. In early 2025, Trump imposed a 10% tariff on all Chinese imports. Tariffs on China Several countries were exempted, but Trump announced that the U.S. government would apply tariffs on $50 billion worth of Chinese imports in 2018. That led to back-and-forth tariff announcements as the Chinese government retaliated in early April 2018 with a 15% or 25% tariff on imports from the U.S. that included 94 different U.S. foods and agricultural tariff lines. In response, President Trump added $100 billion worth of Chinese products to the list. Trump promised more to come on Oct. 1, 2019, though he delayed some of those new tariffs until Dec. 15, 2019, to avoid hurting the Christmas shopping season. As a result of the tariff war, the manufacturing sector of the American economy saw factory output drop, tipping it into a recession . Important Tariffs hurt American farmers so much that President Trump, in collaboration with Congress, had to give them $28 billion in subsidies to ease their economic suffering. In the trade agreement commonly referred to as the U.S-China Economic and Trade Agreement (Phase One), China agreed to increase its purchase of certain U.S. goods and services by $200 billion through December 2021. However, China only imported 58% of the promised goods and services. Trump wasted little time during his second presidential term to impose new tariffs. An additional 10% tariff took effect on all Chinese goods on Feb. 4, 2025. China quickly announced retaliatory tariffs on select American imports, including 15% duties on coal and liquefied natural gas products and a 10% tariff on crude oil, agricultural machinery, and large-engine cars. Trump plans to implement a 25% tariff on goods from Mexico and Canada, but it's currently delayed following negotiations. Trump-Era Tariffs Extended In 2022, then President Joe Biden extended Trump-era tariffs on solar panels and cells. However, a few months later, he declared an emergency regarding electrical services and temporarily suspended tariffs on specific solar cells and modules from Cambodia, Thailand, Vietnam, and Malaysia. What Are the 3 Main Effects of Tariffs? Tariffs raise the cost of imported goods, leading to higher consumer prices. They also make foreign goods more expensive, reducing imports. A targeted country is likely to impose its own tariffs in response, further escalating the conflict. When Did the Trade War Start? The most recent trade war between the U.S. and China began in 2018 when the U.S. imposed tariffs on a wide range of Chinese products, and China responded with its own tariffs on U.S. goods. The Bottom Line Tariff wars, such as the recent U.S.-China trade conflict, are economic battles where countries impose taxes on each other’s exports. While they aim to address unfair trade practices or political disagreements, these wars often lead to higher consumer prices, supply chain disruptions, and long-term economic damage for both parties. Though some short-term benefits might occur, the overall impact on global trade, businesses, and consumers tends to be negative, as historical examples have shown.
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[Why Is Inflation So Stubbornly High? Blame the Stock Market](https://www.investopedia.com/why-is-inflation-so-stubbornly-high-blame-the-stock-market-11944367) Table of Contents Expand Table of Contents - [What Is a Tariff War?](https://www.investopedia.com/terms/t/tariff-war.asp#toc-what-is-a-tariff-war) - [Understanding Tariff Wars](https://www.investopedia.com/terms/t/tariff-war.asp#toc-understanding-tariff-wars) - [Consequences](https://www.investopedia.com/terms/t/tariff-war.asp#toc-the-effect-of-tariff-wars) - [History](https://www.investopedia.com/terms/t/tariff-war.asp#toc-history-of-tariff-wars) - [Recent Trade Wars](https://www.investopedia.com/terms/t/tariff-war.asp#toc-recent-trade-wars) - [FAQs](https://www.investopedia.com/terms/t/tariff-war.asp#toc-do-tariffs-create-trade-wars) - [The Bottom Line](https://www.investopedia.com/terms/t/tariff-war.asp#toc-the-bottom-line) # Tariff War: What It Means, Effect, and History By [Will Kenton](https://www.investopedia.com/contributors/53661/) ![]() ![](https://www.investopedia.com/thmb/1--VSF1cFb3rrNpnZO9ki0pmD8I=/200x200/filters:no_upscale:max_bytes$150000$:strip_icc/wk_headshot_aug_2018_02__william_kenton-5bfc261446e0fb005118afc9.jpg) [Full Bio](https://www.investopedia.com/contributors/53661/) Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School for Social Research and Doctor of Philosophy in English literature from NYU. Learn about our [editorial policies](https://www.investopedia.com/legal-4768893#editorial-policy) Updated February 10, 2025 Fact checked by [Yarilet Perez](https://www.investopedia.com/yarilet-perez-5078533) ![Yarilet Perez]() ![Yarilet Perez](https://www.investopedia.com/thmb/cEF2qOX7iOQUm6i7wsIW7l6w0qo=/200x200/filters:no_upscale:max_bytes$150000$:strip_icc/YariletPerez-d2289cb01c3c4f2aabf79ce6057e5078.jpg) Fact checked by Yarilet Perez [Full Bio](https://www.investopedia.com/yarilet-perez-5078533) Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate. Learn about our [editorial policies](https://www.investopedia.com/legal-4768893#editorial-policy) ![Crane lifting up container in yard full of containers. ](https://www.investopedia.com/thmb/UcpqPZVMnKFoSHDP_oVl2c7hEDE=/1500x0/filters:no_upscale:max_bytes$150000$:strip_icc/GettyImages-997042320-fd83518712464e089f2653c6cb33a605.jpg) ![Crane lifting up container in yard full of containers. ](https://www.investopedia.com/thmb/UcpqPZVMnKFoSHDP_oVl2c7hEDE=/1500x0/filters:no_upscale:max_bytes$150000$:strip_icc/GettyImages-997042320-fd83518712464e089f2653c6cb33a605.jpg) Sasin Tipchai / Getty Images Close ## What Is a Tariff War? A tariff war is an economic conflict in which each country levies an additional tax on the other's [exports](https://www.investopedia.com/terms/e/export.asp). Tariff wars generally start when the leadership of one country is unhappy with a trade partner's trading behavior or for geopolitical reasons. ### Key Takeaways - A tariff war is an economic battle between countries where they levy additional taxes on each other's exports. - A tariff war is designed to hurt other countries economically, as tariffs discourage the citizens of the importing country from buying the exporting country's product by raising the total cost of those products. - Historically, tariff wars are mutually destructive over the long run, though they might offer some short-term benefits. ## Understanding Tariff Wars In a tariff war, one country raises tax rates on another's exports. The recipient of the first country's taxation then raises taxes on its exports in retaliation. The increased tax rate is designed to hurt other countries economically, as [tariffs](https://www.investopedia.com/terms/t/tariff.asp) discourage the citizens of the importing country from buying the exporting country's products by raising the total cost of those products. One country may incite a tariff war because it is unhappy with one of its trading partners’ political decisions. By putting enough economic pressure on the country, it hopes to force a change in the opposing government’s behavior. This type of tariff war is also known as a customs war. ## The Effect of Tariff Wars Tariff wars often have unintended consequences and tend to negatively affect businesses and consumers on each side. For example, China is one of the world's largest (if not the largest) soybean [importers](https://www.investopedia.com/articles/investing/100813/interesting-facts-about-imports-and-exports.asp), and the U.S. is one of the largest soybean exporters. In response to the U.S. tariffs, China placed a 25% tariff on soybeans from the U.S. Brazil, another large soybean exporter, also exports to China. There was no tariff on Brazil's soybean exports, so it naturally experienced an increase in soybean exports to China. This drop in demand for U.S. soybeans caused farmers to end up with more than 3.7 billion bushels of soybeans in storage in 2018. Soybean sale losses were so high that the U.S. government compensated soybean—and other commodity—farmers to the tune of billions of dollars. The Chinese, in turn, had to pay more for soybeans because demand remained the same. Brazil's soybean prices increased by \$0.97 per bushel. Chinese soybean imports from Brazil increased to compensate for the supply change; however, because Brazilian soybean prices increased, China ended up paying about the same for soybeans as it would have if it imported from the U.S. and paid the tariffs. The retaliatory tariff ended up hurting Chinese businesses and consumers anyway. Other issues arise when tariff wars occur. Supply chains are affected, and real exports and GDP decline. Companies might be forced to hire fewer employees, and [capital losses](https://www.investopedia.com/terms/c/capitalloss.asp) could be significant. In 2020, the Federal Reserve found that the trade war with China had cost U.S. firms \$1.7 trillion in market capitalization. ## History of Tariff Wars The U.S. didn't impose high tariffs on trading partners until the 1920s and early 1930s. Tariffs in that era contributed to an overall decline in world trade of about 66% between 1929 and 1934. The [Smoot-Hawley Tariff Act](https://www.investopedia.com/terms/s/smoot-hawley-tariff-act.asp) of 1930 is generally credited with seriously exacerbating the [Great Depression](https://www.investopedia.com/terms/g/great_depression.asp), leading to the election of President Franklin D. Roosevelt, who, in 1934, signed the Reciprocal Trade Agreements Act that reduced tariff levels and liberalized trade with foreign governments. ## Recent Trade Wars Donald Trump was one of the few presidential candidates to speak about trade inequalities and tariffs in 2016. He vowed to take a tough line against international trading partners, especially China, to help American blue-collar workers displaced by what he described as unfair trade practices. When he took office in 2017, his administration first targeted solar panels and washing machines from China. In March 2018, tariffs of 25% were added to imported steel and 10% on imported aluminum. In early 2025, Trump imposed a 10% tariff on all Chinese imports. ### Tariffs on China Several countries were exempted, but Trump announced that the U.S. government would apply tariffs on \$50 billion worth of Chinese imports in 2018. That led to back-and-forth tariff announcements as the Chinese government retaliated in early April 2018 with a 15% or 25% tariff on imports from the U.S. that included 94 different U.S. foods and agricultural tariff lines. In response, President Trump added \$100 billion worth of Chinese products to the list. Trump promised more to come on Oct. 1, 2019, though he delayed some of those new tariffs until Dec. 15, 2019, to avoid hurting the Christmas shopping season. As a result of the tariff war, the manufacturing sector of the American economy saw factory output drop, tipping it into a [recession](https://www.investopedia.com/terms/r/recession.asp). ### Important Tariffs hurt American farmers so much that President Trump, in collaboration with Congress, had to give them \$28 billion in subsidies to ease their economic suffering. In the trade agreement commonly referred to as the U.S-China Economic and Trade Agreement (Phase One), China agreed to increase its purchase of certain U.S. goods and services by \$200 billion through December 2021. However, China only imported 58% of the promised goods and services. Trump [wasted little time](https://www.investopedia.com/what-s-next-in-trump-s-trade-war-8784804) during his second presidential term to impose new tariffs. An additional 10% tariff took effect on all Chinese goods on Feb. 4, 2025. China quickly announced retaliatory tariffs on select American imports, including 15% duties on coal and liquefied natural gas products and a 10% tariff on crude oil, agricultural machinery, and large-engine cars. Trump plans to implement a 25% tariff on goods from Mexico and Canada, but it's currently delayed following negotiations. ### Trump-Era Tariffs Extended In 2022, then President Joe Biden extended Trump-era tariffs on solar panels and cells. However, a few months later, he declared an emergency regarding electrical services and temporarily suspended tariffs on specific solar cells and modules from Cambodia, Thailand, Vietnam, and Malaysia. ## Do Tariffs Create Trade Wars? [Imposing tariffs on a trading partner can create a trade war](https://www.investopedia.com/buffett-says-trump-tariffs-act-of-war-11689411). This is because the country on the receiving end of the tariff is generally unhappy with the action and imposes its own tariffs on its trade partner. ## What Are the 3 Main Effects of Tariffs? Tariffs raise the cost of imported goods, leading to higher consumer prices. They also make foreign goods more expensive, reducing imports. A targeted country is likely to impose its own tariffs in response, further escalating the conflict. ## When Did the Trade War Start? The most recent [trade war](https://www.investopedia.com/terms/t/trade-war.asp) between the U.S. and China began in 2018 when the U.S. imposed tariffs on a wide range of Chinese products, and China responded with its own tariffs on U.S. goods. ## The Bottom Line Tariff wars, such as the recent U.S.-China trade conflict, are economic battles where [countries impose taxes](https://www.investopedia.com/penguins-and-trumps-tariff-war-11711309) on each other’s exports. While they aim to address unfair trade practices or political disagreements, these wars often lead to higher consumer prices, [supply chain](https://www.investopedia.com/terms/s/supplychain.asp) disruptions, and [long-term economic damage](https://www.investopedia.com/tariffs-and-recent-grads-job-prospects-11759124) for both parties. Though some short-term benefits might occur, the overall impact on global trade, businesses, and consumers tends to be negative, as historical examples have shown. Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our [editorial policy.](https://www.investopedia.com/legal-4768893#EditorialPolicy) 1. American Farm Bureau Federation. "[How Much Corn and Soybeans Was in Storage?](https://www.fb.org/market-intel/how-much-corn-and-soybeans-was-in-storage)" 2. Council on Foreign Relations. "[92 Percent of Trump's China Tariff Proceeds Has Gone to Bail Out Angry Farmers](https://www.cfr.org/blog/92-percent-trumps-china-tariff-proceeds-has-gone-bail-out-angry-farmers)." 3. AG Data News. "[How Much Did Soybean Farmers Lose in the Trade War?](https://agdatanews.substack.com/p/how-much-did-soybean-farmers-lose?utm_source=publication-search)" 4. Brookings. "[More Pain Than Gain: How the US-China Trade Hurt America](https://www.brookings.edu/blog/order-from-chaos/2020/08/07/more-pain-than-gain-how-the-us-china-trade-war-hurt-america/)." 5. Federal Reserve Bank of New York. "[The Investment Cost of the U.S.-China Trade War](https://libertystreeteconomics.newyorkfed.org/2020/05/the-investment-cost-of-the-us-china-trade-war/)." 6. U.S. Department of State: Office of the Historian. "[Protectionism in the Interwar Period](https://history.state.gov/milestones/1921-1936/protectionism)." 7. U.S. Department of State: Office of the Historian. "[New Deal Trade Policy: The Export-Import Bank & the Reciprocal Trade Agreements Act, 1934](https://history.state.gov/milestones/1921-1936/export-import-bank)." 8. Federal Register. "[U.S. Department of Commerce Announces Steel and Aluminum Tariff Exclusion Process](https://www.federalregister.gov/documents/2020/12/14/2020-27110/section-232-steel-and-aluminum-tariff-exclusions-process)." 9. Associated Press. "[A Timeline of US-China Tit-For-Tat Tariffs Since Trump’s First Term](https://apnews.com/article/china-us-tariffs-timeline-trump-xi-08b5d468e61ba15e760563ef0186b2bb)." 10. Office of the United States Trade Representative. "[USTR Issues Tariffs on Chinese Products in Response to Unfair Trade Practices](https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/june/ustr-issues-tariffs-chinese-products)." 11. EveryCRSReport: Congressional Research Service. "[China's Retaliatory Tariffs on U.S. Agriculture: In Brief](https://www.everycrsreport.com/reports/R45929.html)." 12. Office of the United States Trade Representative. "[USTR Robert Lighthizer Statement on the President's Additional Section 301 Action](https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/april/ustr-robert-lighthizer-statement)." 13. Peterson Institure for International Economics. "[US-China Phase One Tracker: China’s Purchases of US Goods](https://www.piie.com/research/piie-charts/us-china-phase-one-tracker-chinas-purchases-us-goods)." 14. Associated Press. "[Trump’s Tariff Tactics Carry Higher Economic Risks Than During His First Term](https://apnews.com/article/trump-tariffs-trade-inflation-mexico-china-canada-5e0cad1ba2d9ec086ddf8999b0807dff)." 15. Associated Press. "[Fast Fashion, Laptops and Toys Are Likely To Cost More Due to US Tariffs on Chinese Imports](https://apnews.com/article/china-tariffs-trump-shein-temu-023aaee8f043605e62a614eaa5134f62)." 16. Peterson Institute for International Economics. "[Trump’s Trade War Timeline: An Up-to-Date Guide](https://www.piie.com/blogs/trade-and-investment-policy-watch/trumps-trade-war-timeline-date-guide)." 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Readable Markdown	## What Is a Tariff War? A tariff war is an economic conflict in which each country levies an additional tax on the other's [exports](https://www.investopedia.com/terms/e/export.asp). Tariff wars generally start when the leadership of one country is unhappy with a trade partner's trading behavior or for geopolitical reasons. ### Key Takeaways - A tariff war is an economic battle between countries where they levy additional taxes on each other's exports. - A tariff war is designed to hurt other countries economically, as tariffs discourage the citizens of the importing country from buying the exporting country's product by raising the total cost of those products. - Historically, tariff wars are mutually destructive over the long run, though they might offer some short-term benefits. ## Understanding Tariff Wars In a tariff war, one country raises tax rates on another's exports. The recipient of the first country's taxation then raises taxes on its exports in retaliation. The increased tax rate is designed to hurt other countries economically, as [tariffs](https://www.investopedia.com/terms/t/tariff.asp) discourage the citizens of the importing country from buying the exporting country's products by raising the total cost of those products. One country may incite a tariff war because it is unhappy with one of its trading partners’ political decisions. By putting enough economic pressure on the country, it hopes to force a change in the opposing government’s behavior. This type of tariff war is also known as a customs war. ## The Effect of Tariff Wars Tariff wars often have unintended consequences and tend to negatively affect businesses and consumers on each side. For example, China is one of the world's largest (if not the largest) soybean [importers](https://www.investopedia.com/articles/investing/100813/interesting-facts-about-imports-and-exports.asp), and the U.S. is one of the largest soybean exporters. In response to the U.S. tariffs, China placed a 25% tariff on soybeans from the U.S. Brazil, another large soybean exporter, also exports to China. There was no tariff on Brazil's soybean exports, so it naturally experienced an increase in soybean exports to China. This drop in demand for U.S. soybeans caused farmers to end up with more than 3.7 billion bushels of soybeans in storage in 2018. Soybean sale losses were so high that the U.S. government compensated soybean—and other commodity—farmers to the tune of billions of dollars. The Chinese, in turn, had to pay more for soybeans because demand remained the same. Brazil's soybean prices increased by \$0.97 per bushel. Chinese soybean imports from Brazil increased to compensate for the supply change; however, because Brazilian soybean prices increased, China ended up paying about the same for soybeans as it would have if it imported from the U.S. and paid the tariffs. The retaliatory tariff ended up hurting Chinese businesses and consumers anyway. Other issues arise when tariff wars occur. Supply chains are affected, and real exports and GDP decline. Companies might be forced to hire fewer employees, and [capital losses](https://www.investopedia.com/terms/c/capitalloss.asp) could be significant. In 2020, the Federal Reserve found that the trade war with China had cost U.S. firms \$1.7 trillion in market capitalization. ## History of Tariff Wars The U.S. didn't impose high tariffs on trading partners until the 1920s and early 1930s. Tariffs in that era contributed to an overall decline in world trade of about 66% between 1929 and 1934. The [Smoot-Hawley Tariff Act](https://www.investopedia.com/terms/s/smoot-hawley-tariff-act.asp) of 1930 is generally credited with seriously exacerbating the [Great Depression](https://www.investopedia.com/terms/g/great_depression.asp), leading to the election of President Franklin D. Roosevelt, who, in 1934, signed the Reciprocal Trade Agreements Act that reduced tariff levels and liberalized trade with foreign governments. ## Recent Trade Wars Donald Trump was one of the few presidential candidates to speak about trade inequalities and tariffs in 2016. He vowed to take a tough line against international trading partners, especially China, to help American blue-collar workers displaced by what he described as unfair trade practices. When he took office in 2017, his administration first targeted solar panels and washing machines from China. In March 2018, tariffs of 25% were added to imported steel and 10% on imported aluminum. In early 2025, Trump imposed a 10% tariff on all Chinese imports. ### Tariffs on China Several countries were exempted, but Trump announced that the U.S. government would apply tariffs on \$50 billion worth of Chinese imports in 2018. That led to back-and-forth tariff announcements as the Chinese government retaliated in early April 2018 with a 15% or 25% tariff on imports from the U.S. that included 94 different U.S. foods and agricultural tariff lines. In response, President Trump added \$100 billion worth of Chinese products to the list. Trump promised more to come on Oct. 1, 2019, though he delayed some of those new tariffs until Dec. 15, 2019, to avoid hurting the Christmas shopping season. As a result of the tariff war, the manufacturing sector of the American economy saw factory output drop, tipping it into a [recession](https://www.investopedia.com/terms/r/recession.asp). ### Important Tariffs hurt American farmers so much that President Trump, in collaboration with Congress, had to give them \$28 billion in subsidies to ease their economic suffering. In the trade agreement commonly referred to as the U.S-China Economic and Trade Agreement (Phase One), China agreed to increase its purchase of certain U.S. goods and services by \$200 billion through December 2021. However, China only imported 58% of the promised goods and services. Trump [wasted little time](https://www.investopedia.com/what-s-next-in-trump-s-trade-war-8784804) during his second presidential term to impose new tariffs. An additional 10% tariff took effect on all Chinese goods on Feb. 4, 2025. China quickly announced retaliatory tariffs on select American imports, including 15% duties on coal and liquefied natural gas products and a 10% tariff on crude oil, agricultural machinery, and large-engine cars. Trump plans to implement a 25% tariff on goods from Mexico and Canada, but it's currently delayed following negotiations. ### Trump-Era Tariffs Extended In 2022, then President Joe Biden extended Trump-era tariffs on solar panels and cells. However, a few months later, he declared an emergency regarding electrical services and temporarily suspended tariffs on specific solar cells and modules from Cambodia, Thailand, Vietnam, and Malaysia. ## What Are the 3 Main Effects of Tariffs? Tariffs raise the cost of imported goods, leading to higher consumer prices. They also make foreign goods more expensive, reducing imports. A targeted country is likely to impose its own tariffs in response, further escalating the conflict. ## When Did the Trade War Start? The most recent [trade war](https://www.investopedia.com/terms/t/trade-war.asp) between the U.S. and China began in 2018 when the U.S. imposed tariffs on a wide range of Chinese products, and China responded with its own tariffs on U.S. goods. ## The Bottom Line Tariff wars, such as the recent U.S.-China trade conflict, are economic battles where [countries impose taxes](https://www.investopedia.com/penguins-and-trumps-tariff-war-11711309) on each other’s exports. While they aim to address unfair trade practices or political disagreements, these wars often lead to higher consumer prices, [supply chain](https://www.investopedia.com/terms/s/supplychain.asp) disruptions, and [long-term economic damage](https://www.investopedia.com/tariffs-and-recent-grads-job-prospects-11759124) for both parties. Though some short-term benefits might occur, the overall impact on global trade, businesses, and consumers tends to be negative, as historical examples have shown.
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