August 2019 Trade War

The August 2019 Trade War was an economic conflict between Zamastan and Trive on one side; with Xiomera and Kerlile on the other. The conflict began when Zamastan imposed sanctions on Xiomera for alleged media censorship. A resolution to the conflict was found during a mediation conference in Eiria which began on the 29th August 2019, resulting in the signing of an agreement by all four parties to the conflict which aimed to prevent similar disputes in the future. However, in November 2019, further tensions between Zamastan and Xiomera erupted once more.

Background

Zamastan had historically poor relations with both Xiomera and Kerlile. At the 2019 Tofino Leaders Summit, the Zamastanian delegation issued threats to the Kerlian delegation over alleged interference in the Aelurian Independence Referendum, 2019 - of which no evidence has ever been found. Zamastan also regularly entered into disputes with Xiomera, including a further trade dispute later in 2019 after the resolution in Eiria.

Incidents

Sanctions on Xiomera

During the Extradition Crisis, Xiomera requested the extradition of four journalists living in Zamastan - though these requests were soon dropped. Zamastanian authorities rejected the request, granting the journalists asylum. They also accused Xiomera of engaging in media censorship - imposing a number of harsh sanctions on Xiomera, including tariffs on luxury goods and vehicles, and suspending the export of Zamastanian-made beverages and non-perishable food products. Following these sanctions, a wave of protests against them swept across Xiomeran cities, with protesters attacking Zamastanian businesses.

This led to Zamastan offering return flights to their citizens, and threatening to devalue their currency to impact Xiomeran business. Emperor Topilpopoca of Xiomera made a statement on the burgeoning trade dispute on the 6th August, stating that "Xiomerans do not respond to threats", and stating that if Zamastan did not withdraw their sanctions within 10 days, they would reciprocate. President Anya Bishop of Zamastan signed an executive order to impose a total economic embargo on Xiomera.

Hack of Kerlian media

On the 5th August, Trive launched an unprovoked cyberattack on Kerlile, broadcasting a message on loudspeakers in Kerlile calling the Matriarchy a "rogue state" and offering all Kerlian men Trivian citizenship for five hours. In response, Kerlile raised their threat level to severe, sent members of the Kerlian Women's Liberation Army to assist in border security, and allocated 5 billion Kerlian credits to the nation's Cybersecurity Division. Kerlile also threatened to shoot down any aircraft violating Kerlian airspace. Kerlile also imposed an embargo on all Trivian products until an apology was issued, and issued a travel ban for Trivian citizens. On the 12th August, Prince Yuri Yakovlev of Trive issued a formal apology to Kerlile.

Expanded sanctions

President Rebecca Arnott of Kerlile then announced that, in solidarity with Xiomera, Kerlile would be imposing an embargo on Zamastanian goods. After President Arnott imposed sanctions on Zamastan - the same as those Kerlile had imposed on Trive - President Bishop retaliated, adding Kerlile to the same sanctions package as Xiomera. Emperor Topilpopoca then imposed retaliatory sanctions on Zamastan ahead of the ten-day cooldown period due to the escalation, promising to drop them if Zamastan did also. The Emperor called President Bishop "childish" for calling him a "puppet", which was taken as further insult by Bishop.

Resolution attempts

Sanctarian meeting

Due to the escalating crisis, and its potential effects on the global economy, Sanctaria invited delegates from the four involved nations to meet with their trade secretary, Julia Griffin, to discuss a possible resolution. All parties agreed to attend. Unfortunately, no resolution was found at this meeting.

Eirian conference

Weeks later, on the 29th August, Eiria attempted to host a second attempt at resolving the crisis. Prior to the conference, Zamastan placed the onus on Xiomera and Kerlile to create a "favourable atmosphere". At the beginning of the conference, a devastating earthquake struck Zamastan, with both Kerlile and Xiomera offering condolences and aid. After this development, the conference proceeded quickly and easily, with all four nations signing an agreement restoring pre-conflict trade relations, alongside a further written apology from Trive for the hack of Kerlian media.

Effects on economy

The world economy first started seeing major effects of the dispute on the 7th August - the same day Sanctaria called for a meeting to attempt to resolve the issue. By the 14th August, the stock exchange in Xiomera was reporting losses for five consecutive days, with numerous businesses urging the government to find a resolution to the dispute. Protests were also erupting in Zamastan over the dispute, and over Anya Bishop's general economic policy.