Trade War and Economic Development: The Case of Some Selected Major Economies (Published)
Globally, trade liberalization is seen as a major source of economic development. In spite of this, United States, China and Canada have recently imposed different forms of trade restrictions on selected products from each other’s countries, European Union and Mexico have also threatened different countermeasures to the US’s trade war. These are capable of causing severe negative economic consequences to global trade if not halted. Consequently, this paper examines the impact of trade war on economic development of six selected major economies of the world. The study proxied trade liberalization by import and Export volumes, economic development is measured by Gross Domestic Product (GDP) per capita (constant 2015 US $) and Misery Index (MI) measures economic distress. The study adopted stratified random sampling method in selecting six countries (Australia, United States of America, United Kingdom, Brazil, China and Nigeria) and employed descriptive analytical techniques on these time series data. The study found that, the trends of these indicators were volatile during normal economic circle and even more during major economic shocks like the financial crisis of 2009, the Brexit of 2016 in the UK, the United States’ presidential election campaign rhetoric of president Trump of trade protectionism, deregulation and tax cut and his trade war pronouncements of 2016. The study recommended that no country should unilaterally impose trade restrictions on imports from others countries since it can degenerate into a full-blow trade war. World Trade Organization should ensure that trade disputes among member countries are settled as quickly as possible.
Keywords: Economic Development, misery index, trade war