Economic conflict

Economic warfare is interference in international economic relations by a state, or group of states, for the purpose of improving their relative economic, political or military position. While conventional means of warfare are becoming increasingly less effective during long conflicts, economic and other less obvious means of warfare (guerrilla warfare) may be more effective or disruptive to the enemy.

Trade wars have resulted from attempts by governments to regulate their economies in such a way as to increase their power at the expense of rival countries. This primarily involves attempts to create surpluses of exports over imports. The belief that such surpluses signify national strength and security has led governments to follow policies that have come to be described as 'beggar thy neighbour' policies. By means of tariffs, quotas and devaluation of currencies, governments seek to reduce the entry of foreign goods into their own markets while trying to sell as much as possible to other countries.

The most disastrous trade wars occurred during the 1930s in Europe. They created such instability that trade declined and finally collapsed, bringing on the period of the 'great depression'.