How does trade policy affect international relations?

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How does trade policy affect international relations?

Trade policy can have a significant impact on international relations. It can either foster cooperation and positive relationships between countries or create tensions and conflicts. Trade policies that promote free trade and open markets can enhance economic interdependence and encourage diplomatic cooperation. This can lead to stronger diplomatic ties, increased cultural exchange, and improved overall relations between nations. On the other hand, protectionist trade policies, such as tariffs and trade barriers, can strain international relations by creating trade disputes, retaliatory actions, and economic conflicts. These policies can lead to trade wars, strained diplomatic relations, and a breakdown in international cooperation. Therefore, the nature and implementation of trade policies play a crucial role in shaping the dynamics of international relations.