Business Reactions to Trade Wars

By Sungjoon Cho [originally posted on the International Economic Law and Policy Blog on April 14, 2019]

There is a Chinese saying that “when there is a policy from the above, there is a reaction from the below” (“上有政策, 下有对策”).  This is exactly what has happened since the inception of trade wars.  Both domestic and international businesses have attempted to avoid the punitive tariffs through various means, such as the exclusion application, transshipment and tariff engineering.  As you can imagine, some have been successful; others not.

The Financial Times has recently offered an excellent simulation game (“Dodging Trump’s Tariffs”) in which readers can educate themselves about intriguing consequences of trade wars.  The simulation game is based on real examples.  Highly recommendable!