International Trade Wars and its Effects on International Business Management

This article discusses the current world event of international trade wars and its effects on international business management. It provides relevant examples and analyzes the challenges faced by business owners and investors in affected nations.

Running head: INTERNATIONAL MANAGEMENT 1
Name
Course
Lecturer
Date

INTERNATIONAL MANAGEMENT 2
International trade wars
According to the (Business dictionary, 2018) international trade wars can be defined as a
rise in conflict between two or several countries as a result of trade tariffs on each other. The
conflicts are triggered when the countries involved try to improve on their imports or even
exports neglecting the effects on the other countries. This consequently leads to increase in the
cost of some imports if the countries involved fail to compromise. If they compromise, then a
conflict arises and thus termed as international trade war which in most cases is a form of cold
war. This is one of today's or current world events happening in the business world today.
Almost every country exports and imports some goods and therefore, it’s the nature of the
business to have potential competitors, for some countries to win the large market share, they are
opting imposing trade tariffs that may be unfavorable to other countries and therefore a rise of
conflict. International trade wars are greatly affecting international business management
whereby capability to carry out and manage trade activities like transaction, import and export of
goods within some of the affected nations are challenging. (Luthans & Doh, 2014) Some of the
most affected nations include United States of America, China, Germany, Mexico, and Korea.
This is an attempt to discuss how these international trade war as current event affects
international business management with help of relevant current examples.
World incidences an example of international trade wars
 The Chinese government is pressing Europe to opt for an anti-US trade alliance whereby
they want to join forces against the united states during a world trade organization
summit
 The US move on blocking china’s mobile from entering the US market together with
offering telecommunication market with a claim of posing a security risk to the nation
 The Iran vs US war trade on oil whereby US aims at reducing Iran’s potential oil revenue
to zero level, whereby US government warns the world against trading with Iran
 China issues US travel warning during a key trade week for the united states.
 Us announces on increased levies for importing steel and aluminum (the US business,
2018)
Effects of these events on international business management
From the above events, it can be noted that most of these involved nations are imposing some
tariffs and restriction to outdo the competing nation in terms of business. They seem to be
conflicting for the most powerful nation in terms of trade and this will and has already started
affecting international business management. Business owners and foreign or local investors
within those nations cannot effectively and efficiently run their business and meet their
objectives. Taking an example of an investor based in Mexico, who intends to invest in the oil
industry, sourcing the oil from Iran, out of the warning issued by US government, on the risks of
trading with Iran, they will be discouraged or hesitate to have such a deal and thus affecting
international trade and management. ( Davies , 2017)
The same case applies to China located potential investors in the telecommunication industry
as per the situation stated above on us blockage on china mobiles in the US territory. Trade wars
may not only affect the affected nations but also the world economy at large therefore posing a
challenge for international business management. For instance, after the US restricted the
importation of steel from China, on the other hand, Japan that is well known for vehicle

INTERNATIONAL MANAGEMENT 3
assembling also threatened to increase the prices for all its vehicles which will affect not only us
but the entire world and it will be challenging to manage vehicle assembling industry anywhere
in the world. From this analysis and discussion, a conclusion can be drawn on the basis of
current events that, it’s very challenging to practice international business management in
countries that are partners in international trade wars.

INTERNATIONAL MANAGEMENT 4
References
Davie, G. (2017). The economic damage from a trade war. The financial times, 13.
Business dictionary. (2018, July 03). international trade war. Retrieved from the Business dictionary:
http://www.businessdictionary.com/definition/trade-war.html
Luthans, F., & Doh, J. P. (2014). International Management: Culture, Strategy, and Behavior. London: Mc
Graw Hill.
the US business. (2018, July 3). International business. Retrieved from The globe and the mail:
https://www.theglobeandmail.com/business/international-business/