The Impact of Trade Wars on the Global Economy

The trade war between major countries, especially between the United States and China, has had a significant impact on the global economy. High tariff policies and trade restrictions create uncertainty in various sectors. This impact affects not only these two countries, but also other countries involved in the global supply chain. One of the main impacts of a trade war is a slowdown in economic growth. According to many research institutions, trade tensions can hinder domestic and foreign investment. Investors become hesitant to invest capital when they feel that uncertainty will continue. As a result, many companies slowed expansion or even revised their growth projections. On the other hand, certain industries experience temporary benefits due to increased domestic demand after tariffs are imposed on imported goods. For example, the steel and aluminum industries in the US benefit from the protection of these tariffs. However, increases in raw material prices often result in higher inflation, suppressing consumer purchasing power. Global supply chains, which are already highly integrated, also face challenges. Many companies that depend on raw materials from certain countries find that their production costs increase due to high tariffs. In some cases, companies begin to look for alternative sources or move production locations, which can increase costs and reduce efficiency. Small countries that rely on exports to big markets such as the US and China have also been hit hard. When these two economic giants engage in disputes, third countries risk losing access to profitable markets. Developing countries often lack the bargaining power to negotiate deals that benefit them amid these tensions. In addition, trade wars trigger financial market instability. State and corporate debt increased amid limited liquidity. The general public is becoming more worried about economic conditions, which is causing their purchasing power to decline. This uncertainty also encourages investors to switch to safer assets such as gold or government bonds. In a geopolitical context, trade wars also create new alliances. Affected countries often seek new economic synergies to overcome pressure from powerful countries. This led to a change in trade dynamics, where countries that were not previously involved in bilateral trade sought to strengthen relations in their respective economic interests. The social impact of the trade war is no less important. The increase in prices of consumer goods due to tariffs affects the daily lives of many people. People are at risk of experiencing a decline in quality of life as the cost of living increases. This has the potential to create social tension and dissatisfaction among society. Finally, in the long term, a trade war could trigger the launch of new economic policies. Countries are starting to innovate and produce products with higher added value, seeking to reduce dependence on technology from other countries. The focus on sustainability and local production is becoming more relevant, creating new dynamics in the global market. Thus, the impact of the trade war on the global economy is broad and multi-layered, affecting sectors from investment to social policy.