Escalation, economic coverage and institutional scope in trade wars

Trade conflict, dispute or war - what is in a word? In this chapter, we construct a typology of trade conflicts based on two key dimensions of trade policy: the economic coverage and institutional scope of the policy instruments. Along the first dimension, conflicts range from from small, product-specific disagreements to large, across the board conflicts, affecting entire economies, while the second dimension captures variation in the number and type of actors that are involved in the decision-making process. In four case studies, we illustrate how trade wars can be classified based on varying degrees of intensity and we provide insights into how a conflict can move up the ladder of escalation. Finally, we review some of the classical explanations for containment and escalation of trade conflicts.