Skip to main content

Trade Battle

IN STOCK Goods from around the globe sit on ships docked in Oakland, California. JUSTIN SULLIVAN—GETTY IMAGES

For more than 40 years, China and the United States have been trade trade TETRA IMAGES/GETTY IMAGES the process of buying, selling, or exchanging goods and services (noun) Lulu and I have a trade agreement in place, whereby she swaps her peanut butter sandwich for my ham sandwich at lunchtime. partners. The countries have bought and sold each other’s goods, from technology to food and steel. Trade has helped each country grow its economy and fostered a friendly relationship between the two.

Now China and the U.S. are in a trade war. On September 24, the U.S. began taxing $200 billion in goods from China. In response, China will tax $60 billion worth of American goods. These taxes, or tariffs tariff ANA MARIA SERRANO/EYEEM—GETTY IMAGES a tax on goods coming into or leaving a country (noun) The president placed tariffs on wheat and corn. , make imported goods more expensive. That makes people less likely to buy them.

President Donald Trump says tariffs are necessary to correct an unfair trade balance. The U.S. buys more goods from China than China buys from the U.S. Last year, the U.S. imported $505 billion in goods from China. U.S. exports to China totaled just $130 billion. That’s a difference of $375 billion.

China and the U.S. have the two biggest economies in the world. They already hit each other with billions in tariffs this summer. Trump has said he will tax another $267 billion in Chinese imports if the country fights back with more tariffs of its own. The amount would cover nearly everything China sells to the U.S., including phones, clothes, and shoes.

Some experts say the new tariffs will have a negative effect on American buyers. “Lower-income families . . . are most [affected], given the likelihood of tariff-related price increases on everyday items,” according to Bloomberg Intelligence.