A trade war is a dispute between countries over tariffs or other restrictions on trade. The purpose is to protect local industries or save jobs, but the overall effect slows growth and reduces trust between nations.
Trade wars raise prices for consumers who must pay more for imported goods. Farmers and exporters also suffer if their goods are targeted by retaliatory tariffs. They may lose sales or shift production to avoid the taxes. These changes can disrupt global supply chains. Eventually, both sides usually agree to negotiate a better deal.
The trade war between the US and China has raised costs for people around the world. The Trump administration has levied tariffs on billions of dollars worth of Chinese products in response to allegations that Beijing steals American technology. This has led to retaliatory tariffs by China on US products like soybeans, aeroplanes and cars. These tariffs have raised the cost of those goods in China, making them less affordable for consumers there.
The US and China have been talking about a trade deal for months. Negotiators have met in London, Geneva and Stockholm. Sky-high tariffs have been paused while the two sides try to work out a better agreement. But there is still much uncertainty about the outcome of the negotiations.
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