By Melito Salazar Jr. US President Donald Trump has tweeted, “Trade wars are good and easy to win.”  This after he had tweeted that the United States will impose a 25% and 10% tariff on imports of steel and aluminum, respectively. Immediately, The Guardian reported that the European Union is preparing punitive tariffs on iconic brands produced by key Republican constituencies which are expected to put political pressure on President Trump to rethink his plans to increase tariffs on steel and aluminum.  According to a list drawn up by the European Commission and obtained by Bloomberg News, the EU aims to apply a 25% tit-for-tat levy on a range of consumer, agricultural and steel products imported from the US worth $3.15 billion. Canada and China also expressed that they would respond with tariffs of their own that could lead to billions of dollars in American export losses.  Canada’s minister of foreign affairs, Chrystia Freeland said that Canada stood ready to defend its trade interests while the Li Xinchuang, vice -chairman of the China Iron and Steel Association called the president’s move, “stupid,” saying, “Trump’s decision does no good to everyone except a few American steel enterprises.”The New York Times further reported that Australian trade minister, Steven Ciobo, said that tariffs would set off retaliatory measures that would hurt everyone. As we look at the unfolding spectacle of global recovery being hijacked by President Trump’s latest move, it may be worth examining what causes trade wars and whether President Trump’s assertion that it could be won is correct.  It is possible the result could be all losers and no winners, as far as all the countries are concerned. Protectionism is the cause of trade wars.  A country wants a certain industry to be protected from what it considers unfair trade practices from other countries or sees that the products of its industry is not competitive with imports.  In the case of President Trump, he most probably will invoke an obscure trade law which allows him to raise tariffs for “national security reasons.” In the international arena of trade, unfair trade practices can be dealt with firstly by a country utilizing its own mechanism to establish the prevalence of such practice, like dumping and undertake remedial measures.  It can also be brought to the World Trade Organization for decision and if warranted the country engaged in unfair trade practices can be fined to the extent of the damage inflicted on the local industry.  These alternatives are available in lieu of imposing tariff. In instances when a domestic industry is seen to be non-competitive vis-à-vis imports the solution is to make that industry competitive by increasing investments or providing government support for technology upgrading, human resources development, expansion of capacity and tackling the problems that deter the ease of doing business.  Tariff imposition could just lead to the perpetuation of inefficiencies in that industry and cause less productivity in the manufacturing sector. Worse is the effect on other industries that use its output as inputs; costs will go up as import prices increase with the tariff, deficient inputs could lead to inability of these industries to compete with imports and ultimately the consumer suffers because of higher prices and lesser quality products.  Will the country also increase tariffs of the competing imports of these industries?  If it does then such will lead to further inefficiencies and make the country’s own exports less competitive. Given this scenario, the other countries are expected to retaliate with their own protectionist moves.  Exports of the country that initiated the imposition of tariffs will suffer leading to losses for its companies and loss of jobs for the workers.  The trade war then begins, and every country involved suffers.  The greater victim will be the global economy as trade shrinks.  The citizens of the world will suffer as prices increase, quality of products deteriorate, and jobs are lost. President Trump, no one wins trade wars; everyone loses. [email protected]