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Two of the world's biggest economies are at war. A trade war that is. And they’re trying to talk things out.
Give me the background.
President Trump has been calling for people to pay attention to China and its trade practices since long before he entered the White House. Now that he's there, he's taking up the issue. According to the Trump admin, it's that China says the country has been very unfair with its trading practices – specifically accusing China of unfairly getting access to US intellectual property.
What's he done about it?
Tariffs. On tariffs. Quick reminder: tariffs are taxes charged on foreign imports. So here’s an example: Imagine a country puts a 20% tariff on an imported dishwasher. If the price set by the exporter is $600, there would be an additional tariff of $120, making the total import price $720. And tariffs are paid to the government by companies buying the imports. And many importers of Chinese goods are US companies.
K but I imagine it's a lot more than a dishwasher?
A lot more. It officially started in March last year with the Trump admin hitting pretty much every country with tariffs of 25% on steel imports and 10% on aluminum imports – which Trump said would protect US workers from foreign competition. Then, China retaliated with tariffs on about $3 billion worth of US goods. Since then, neither side blinked. Until late last year, Trump and Chinese President Xi Jinping said 'why can’t we be friends.' That meant putting new tariffs on hold while the two countries tried to negotiate a new deal.
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