Hot Topic: Trade Wars – Economics Awakens

By Ninos Malek,  May 2018

INTRODUCTION:

“Trade wars are good and easy to win.”  ~President Donald Trump

“Wars make not a person great.” ~Jedi Master Yoda

Have you ever traded baseball cards or lunch items with a friend? What made you trade? If your friend has done something to irritate you, and you decide to punish him by saying: “This is war! I am not trading with you anymore!” is your friend the only one who will lose? In a war, there are winners and there are losers. We refer to that as a zero-sum game. However, when two individuals voluntarily trade, then both individuals are winning, or the trade would not have taken place. We refer to that as a positive-sum game.

So if trade is a positive-sum game and war is a zero-sum game, what about a “trade war”?

KEY CONCEPTS:

• International Trade
• Trade Barriers
• Balance of Trade
• Public Choice Theory

MATERIALS:

Download Trade Wars – Economics Awakens classroom materials.

• Essay (Student Reading)
• Student Handout
• Teacher Guide

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