Global trade wars have emerged as a significant threat to international economic stability in the 21st century. This study examines the far-reaching consequences of protectionist policies and trade disputes on the global financial landscape. The purpose of this research is: 1) To understand the leading causes and motivations of contemporary international trade wars; 2) To investigate the direct and indirect effects of trade wars on international economic stability, including impacts on GDP growth, inflation, and capital movements; 3) To explore policy options to mitigate these negative impacts and achieve more cooperative international economic governance. Through a synthesis of quantitative data and qualitative policy analysis, the paper argues that trade barriers not only distort economic relationships but also destabilize the multilateral institutions that global development depends on. The findings highlight that while advanced economies show some resilience, emerging markets bear a disproportionate burden of the volatility caused by economic decoupling.