Assessing the Long-Term Economic Impacts of Trade Wars on Global Supply Chain Stability and Costs

Abstract

The long-term economic impacts of trade wars on global supply chain stability and costs have become a critical area of analysis due to the increasing frequency and intensity of trade conflicts in recent years. This paper uses a qualitative literature review methodology to explore how trade wars influence global supply chains, focusing on the effects on stability, operational efficiency, and costs. The findings highlight that trade wars often lead to significant disruptions in global supply chains, creating volatility in trade flows, increasing production costs, and prompting companies to reassess their sourcing strategies. The paper identifies key factors such as tariff imposition, shifts in trade policies, and the reconfiguration of global trade networks that contribute to both short-term shocks and long-term structural changes in the global supply chain landscape. Furthermore, the study examines the cost implications for businesses, particularly in terms of raw material costs, labor adjustments, and transportation disruptions. The analysis suggests that while businesses may seek to mitigate risks through diversification and regionalization of supply chains, the long-term economic impact of trade wars could potentially result in higher operational costs and a more fragmented global supply chain system. The paper concludes by proposing policy recommendations for managing trade tensions and ensuring the resilience of global supply chains in the face of trade wars.