Give me some context…President Trump started a trade war with China last year by applying tariffs (aka taxes) on products that come from China, making Chinese products more expensive in the U.S. This makes Chinese businesses lose money because Americans might buy other less expensive products.
Why would Trump do that?
- The U.S buys more from China than China buys from the U.S
- Accuses China of intellectual property theft of US technology– This means that China makes knockoffs of designer brands while borrowing technological breakthroughs
The war unfolded as follows:
- Trump imposed tariffs on a lot of Chinese goods (flat-screen televisions, aircraft parts…). This products will now face a 25% tax when imported to the U.S.
- Chinese President Xi Jinping was like “ok, I see your tariffs and raise you the same”. China imposed tariffs on 128 American products including aluminum, airplanes, cars, pork, and soybeans.
- Trump continues imposing more and more tariffs– totaling more than $250 billion. China too.
Who loses the war? Chinese companies, American companies, and consumers, who will find the products they buy more expensive.
After almost 2 years, the U.S. and China have reached an initial trade deal.