Will there be a global trade war? Donald Trump has shocked the world by doing exactly what he said he would do.
Trump's trillion dollar tariff gamble
Will there be a global trade war? Donald Trump has shocked the world by doing exactly what he said he would do.
US president Donald TrumpAn American television personality who became US president from 2016 to 2020, and will become president again in January 2025. has two big ideas. Firstly, immigrationThe permanent movement of people into a country. , especially illegal immigration, is bad. Secondly, tariffsA form of tax on imports. are good.
He told voters last year that he would create new tariffs. Even so, when he placed tariffs on more than one trillion dollars of importedWhen goods are brought into one country from abroad to be sold. goods from America's neighbours CanadaA country in North America. It is the second-largest country in the world by land area. and MexicoA country in the southern part of North America. It shares a long border with the USA. Most people in Mexico speak Spanish. , it still took people by surprise.
A tariff is a taxMoney workers pay to the government to pay for services like roads and hospitals. on goods brought into the country. They make buying goods made in other countries more expensiveCosts a lot of money. . The idea is that people will choose to buy American-made goods instead.
Tariffs are not unusual. Most countries place some taxes on goods coming in from abroad.
However, many economistsExperts in economics, the branch of knowledge concerned with the production, consumption and transfer of wealth. believe that tariffs end up making everyone poorer.
Tariffs mean that people have fewer choices of goods to buy. They end up paying higher prices to get their hands on the few items that remain on shelves.
Moreover, other countries often put their own tariffs on goods in response. This can start a trade warWhen countries try to damage each other's trades. They can do this by placing tariffs (taxes) on goods or quota restrictions. .
Trump is doing something new. He is using tariffs to put pressure on his neighbours to stop smugglingThe illegal transportation of goods, especially into or out of a country. and illegal immigration.
Some say this gamble is paying off. Last night, Trump announced that tariffs on Mexico and Canada will be delayed after the countries agreed to improve security.
Will there be a global trade war?
Yes! Other countries are not going to sit by while the USA puts tariffs on their goods. They will create their own tariffs in response, starting a trade war.
No! Trump is playing a game. He knows that other countries will not want a trade war. He thinks they will give in to his wishes so that he removes the tariffs.
Donald Trump - An American television personality who became US president from 2016 to 2020, and will become president again in January 2025.
Immigration - The permanent movement of people into a country.
Tariffs - A form of tax on imports.
Imported - When goods are brought into one country from abroad to be sold.
Canada - A country in North America. It is the second-largest country in the world by land area.
Mexico - A country in the southern part of North America. It shares a long border with the USA. Most people in Mexico speak Spanish.
Tax - Money workers pay to the government to pay for services like roads and hospitals.
Expensive - Costs a lot of money.
Economists - Experts in economics, the branch of knowledge concerned with the production, consumption and transfer of wealth.
Trade war - When countries try to damage each other's trades. They can do this by placing tariffs (taxes) on goods or quota restrictions.
Smuggling - The illegal transportation of goods, especially into or out of a country.
Trump’s trillion dollar tariff gamble

Glossary
Donald Trump - An American television personality who became US president from 2016 to 2020, and will become president again in January 2025.
Immigration - The permanent movement of people into a country.
Tariffs - A form of tax on imports.
Imported - When goods are brought into one country from abroad to be sold.
Canada - A country in North America. It is the second-largest country in the world by land area.
Mexico - A country in the southern part of North America. It shares a long border with the USA. Most people in Mexico speak Spanish.
Tax - Money workers pay to the government to pay for services like roads and hospitals.
Expensive - Costs a lot of money.
Economists - Experts in economics, the branch of knowledge concerned with the production, consumption and transfer of wealth.
Trade war - When countries try to damage each other's trades. They can do this by placing tariffs (taxes) on goods or quota restrictions.
Smuggling - The illegal transportation of goods, especially into or out of a country.