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If you’ve been watching the news, you’ve likely been hearing about tariffs being passed back and forth between the US and China. This could be called by some a trade war, although an actual trade war would be more like the countries of the world imposing their own 10% tariff increase.

The current rapport and trading of tariffs between the U.S. and China, two global superpowers, highlights the challenges of dealing in foreign markets. It’s important to know what’s going on in the world if you expect to conduct international business successfully. None of engage in a business venture to fail, after all.

You might have read about tariffs in the newspaper or heard political pundits talking about them last month, because Trump imposed tariffs on nearly $200 billion of Chinese imports, threatening further levies if the Chinese retaliated. China then hit back with tariffs on $60 billion of US imports. So what happens when a trade war starts to grow like this?

Well, for one, the International Monetary Fund cut its global economic growth forecast — for 2018 and 2019, mind you.

How do tariffs and trade wars affect International Business? — you might be wondering. Great question!

An all-out trade war packs a serious gut punch to global economic growth. Why? Because trade wars reduce in trade volume Not only that, trade wars result in supply chain disruptions, not to mention a serious loss in confidence.

There’s no sure-fire way to quantify how much damage entrenched trade battles could end up costing the international community surrounding them. There are a few possible scenarios.

One, a country can raise tariffs on all imports — let’s say by 10% with no retaliation. Next, the country imposing tariffs can be met with equal force by the opposing nation, while other countries that happen to be targets of U.S. tariffs imposing their own 10% tariff increase on imports coming out of the U.S.

Lastly, the other scenario is that the entire globe raises tariffs by 10% — this would be the real world trade war scenario.

Knowing what’s going on in the world and making sure you know the global temperature is crucial to the international business. Visit the Jason Proch site for the latest information that will help you make informed decisions.