ASSESSING THE LONG-TERM ECONOMIC IMPACTS OF TRADE WARS ON GLOBAL SUPPLY CHAIN STABILITY AND COSTS

Abstract

This study examines the long-term economic impacts of trade wars on global supply chain stability and costs, focusing on how these conflicts shape business strategies, cost structures, and global trade dynamics. Given the increasing frequency of trade wars, particularly the US-China trade conflict, understanding their enduring effects on supply chains is critical for both academic research and practical decision-making. A qualitative literature review approach was employed, synthesizing existing studies, case reports, and theoretical frameworks to explore how trade wars influence supply chain management. Thematic analysis was used to identify key themes, such as cost escalation, supply chain diversification, regionalization, and technological adaptation. The findings reveal that trade wars significantly increase operational and logistical costs, forcing businesses to adjust pricing strategies and reevaluate production models. Additionally, businesses are adopting strategies such as diversification and regionalization to mitigate trade risks, while also investing in digital technologies like blockchain and AI to enhance supply chain resilience. These shifts indicate a broader reconfiguration of global supply chains, as companies reduce reliance on traditional global hubs and move toward more regionalized networks. This research contributes to the existing literature by emphasizing the long-term, structural changes resulting from trade conflicts, offering new insights into how businesses adapt and innovate in response to such disruptions. The implications for policymakers and businesses are substantial, highlighting the need for flexible strategies in a volatile trade environment. Future research could explore the impacts of other trade disputes and gather primary data to gain deeper insights into real-time corporate responses.