The effect of 21st century trade wars on competitiveness

Within the scope of this study, the concept of 'Neo Mercantilism' was first examined. Neo-merkantilism is based on mercantilist philosophy. As a result of the neo-mercantilist policies implemented today; economic policies are becoming more and more protectionist. Countries aim to protect their own economies and implement various tariff barriers. As a result, countries that are the recipients of the tariffs respond by retaliating. Trade wars emerge as a result of these mutually enforced sanctions. Trade wars have been experienced from time to time throughout history and continue to be experienced today. Within the scope of the study, the history of protectionist policies and trade wars is examined, and the historical process about similar economic events in history is discussed in general and compared with today. All this theoretical work is supported by a literature review. Finally, the US-China trade war in the 21st century is analyzed chronologically. However, the main focus of the study is the retaliatory actions of the EU against the protectionist policies of the USA and the results of these actions.In the second stage of the study, the concept of competitiveness is emphasized. First, the concept of RCA is examined. RCA analysis is one of the most common methods used to measure competitiveness. In the RCA analysis made in this research, first the import tariffs implemented by the USA and then the import tariffs implemented by the EU are examined. Goods and groups of goods selected as examples and subject to tariffs by the European Union; In general, these are the products that the USA has a relative superiority in imports on a global basis. The European Union has almost preferred to respond to the sanctions of the USA by carefully choosing the iconic goods of the USA in general. For this reason, the effect of the economic conflict between the EU and the USA on the competitiveness of the countries is examined. For this, the largest importers and exporters are analyzed first in the selected goods and commodity groups. Afterwards, RCA analysis is performed for the largest exporters. Keywords: Trade Wars, Mercantilism, Neo-Merkantilism, RCA Analysis, Competitivenes