Why is Trading with different countries so important and why did the US force japan to trade internationally even if they didn’t want to ?
In: Economics
Say you and I are countries and we each have two important industries: Food and Energy. If we had personal disagreements and went to war we would both have food and energy. But say a third more powerful country forced me to get my food from you and you to get your energy from me. For a while we both might still be able to produce food and energy, but over time my people would stop producing food and your people would stop producing energy because it would no longer be profitable. If we then had a personal disagreement and tried to go to war, I wouldn’t have any food and you wouldn’t have any energy. We would be forced to compromise and work together to meet our people’s needs.
This strategy is sometimes termed globalization and is a hallmark of US foreign policy. As the more powerful third party in many situations the US likes to force nations, like post-WWII Japan, to trade with its allies. That way if the nation goes to war its less likely that it will be against the US or its allies. An additional benefit of this policy is that once nations are strong armed into trade agreements and domestic production atrophies, the US can sanction disobedient nations and its allies will comply. Interestingly, such agreements make it more difficult for the US to go to war with the signatories because such a war would affect the US’s allies.
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