Writing on the topic of our applying economic pressure on Turkey as a means of getting an American hostage (among others) freed, Greg Ip expressed surprise and worry about the weaponization of trade in his Wednesday Wall Street Journal article.
Trade wars may be morphing into something more dangerous: financial wars.
This, though, merely exposes his misunderstanding of international trade. Such trade is far more about national policy applied internationally than it is about economics, and international finance is just a tool of that trade venue. Trade has always been “weaponized;” it has always been about achieving national political goals, of which economics is merely one.
Ip’s discourse also misuses the term “war;” although, he is not alone in this error. Trade “wars,” even with finance tools being used extensively, are not shooting conflicts, and even with the global financial dislocations of events like the Great Depression or the Panic of 2008, nations’ existences were never at risk. While trade, freely wielded as a tool of policy, can be effective at pushing the targeted nation to alter its behavior, it never threatens that nation’s independence. It’s never war.