By George Friedman
The United States’ decision to impose tariffs on steel and aluminum imported from certain countries has added to the fears of a trade war. Some believe that these tariffs are a dangerous move by the U.S. because they will invite retaliation and thus could lead to a massive breakdown of trade. The problem with this way of thinking, however, is that it focuses primarily on formal barriers to trade and ignores informal and indirect barriers. Even if there is a free trade agreement between two countries, it does not necessarily mean that businesses in both countries will be able to trade with each other without impediments, as is often assumed.
Governments have a range of tools available, formal and informal, designed to mitigate the effects of free trade. In other words, a free trade agreement will eventually evolve into something very different. For example, regulations can be put in place that impose massive additional costs on an exporting country, forcin
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