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Bwog Finance: Trump’s Trade War

Our president, bravely facing the adversaries

Bwog Finance does more than just your personal banking–we help explain world phenomena, too! Check out our latest column, offering a digestible overview of Trump’s trade war with China (and other countries). Remember, if you have questions or column topic ideas, email finance@bwog.com.

If you read the news, or follow my twitter account, you may have heard about Trump’s trade war with China. The “war” hasn’t really started yet–it’s just a looming possibility, spurred by Trump’s proposed tariffs on imports from China. Talks between the U.S. and China to avert a trade war began on Wednesday and ended yesterday. The talks were inconclusive, so a trade war is still possible–and China has said it will fight to the end if one breaks out.

What is a trade war, anyway? It’s when two countries go back and forth imposing high tariffs (read: taxes) on each other’s imported stuff. This means there’s less trade between these countries (and maybe proxy countries as well). Read this Vox article to learn more.

Why should you care? Because, even though you’re not directly importing things from China, this could have drastic effects on the stock market. And even if you’re not directly invested in stocks, this is still bad news, because a lagging market will affect all kinds of things–job opportunities, your parents’ retirement funds, even interest rates. Speaking of your parents, you’ll probably be hanging with them again soon since it’s the end of the semester. We’ve compiled a list of six fast facts about the trade war so you can show them you’re learning a lot and are capable of holding an impressive conversation.

Six Things To Know About The Trade War

  1. On May 3, 1,100 economists signed a letter telling Trump not to impose tarrifs.
  2. It’s not just China! In March, Trump announced tariffs on all steel and aluminum imports, from any country.
  3. Trump wants tariffs for China specifically because of the huge, $375 billion trade deficit with China.
  4. A trade deficit means we’re importing more from China than we’re exporting to them.
  5. The dollar is weak right now, compared to a lot of other currencies. That means it’s worth less. But a weak dollar helps companies that want to export to China. So it’s a good and a bad thing.
  6. It’s not clear who “won” the U.S.-China talks or if there’s even a winner! Based on your parents’ political leanings, you can say: a) U.S. won. b) China won. c) There is no winner. d) Trade war is imminent.

Happy studying, and maybe try to reinvest your stocks/change your investments to bonds or something less volatile longterm (you didn’t hear it from us!).

Trump pic via Wikimedia Commons, by Michael Vadon [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)]

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2 Comments

  • LOL says:

    @LOL Just like the so called “experts” warned us on North Korea and the Trump Tax Cuts?

    Fake news.

  • LOL Also says:

    @LOL Also Please explain how a trade war can be bad when you’re already running a DEFICIT? Seems like there’s nothing to lose. Not like American goods are flying off the shelves in mainland China??

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