Who is winning the present trade war?

Abstract:

This very wrong question is put as the title of the analysis of the implications of the Trump's trade war as a provocation for three reasons. Firstly, because in this era of fake news and false or parallel reality, one has to be provocative in order to get attention in the flood of too many fake news and rising populist policies presenting simple but false solutions which attract general public, although they are mostly based on ignorance. Secondly, because it is theoretically and empirically proven that nobody can win a trade war, it is a lose-lose exercise, not a win-lose one, that it is beggaring thyself policy. Thirdly, because US imposed tariffs are triggering out trade negotiations with all countries in the world, and it would be silly to ask who is winning in negotiations. It is like asking the question, who is winning in a marriage or in sex? Both partners have to be happy, otherwise the marriage is driving towards a divorce.

The purpose of this article, which is partly based on an earlier text (Svetličič 2025a), and of course updated according to recent developments, is first to set the global context in which the present trade war is going on. Secondly, to set the theoretical framework what its implications could be. Thirdly, to empirically evaluate possible implications of trade war on the selected, most important economies. The final chapter is devoted to the implications for the world economy, now and possibly in the future.