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China and America’s trade war just got even bigger

Trump taxed Chinese stuff, so China taxed American stuff, so Trump taxed more Chinese stuff, so China is taxing more American stuff …

Trump taxed Chinese stuff, so China taxed American stuff, so Trump taxed more Chinese stuff, so China is taxing more American stuff …

What it means: Generally, countries quite like trade, or selling and buying stuff from other countries. And Americans really like buying Chinese stuff - they spend about $500 billion a year on it, more than they spend on stuff from any other country. China likes buying American stuff too, but not quite as much (they only spend $130 billion a year). Economists call this mismatch a trade deficit and Donald Trump is really, really mad about it. If you all think that sounds a little silly because nobody is forcing Americans to buy all this Chinese stuff, well, most economists would agree with you.

Trump called his Chinese counterpart, Xi Jinping, out on it, and now the two countries keep announcing bigger and bigger taxes (called tariffs) on each other’s stuff. Trump started it, and his tariffs are bigger - he’s already taxing about half of everything China sends to America, and has just announced plans to tax absolutely everything.

Trump's tariffs make Chinese stuff more expensive for Americans to buy (and vice versa). That should encourage Americans to buy less Chinese stuff and (Trump hopes) more locally-made things instead. That can be a good thing - when Americans buy American-made things they support American businesses and jobs, and they don’t have to worry that China is sneakily putting dodgy spy stuff in the technology they’re sending over.

But everyday Americans might not be impressed at having to fork out more money when they go shopping (Chinese goods are often cheaper than the American equivalents), and American businesses are moaning that all the parts they buy from China will become so much more expensive that they might have to fire some American workers to make ends meet.

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