"Tax" by 401(K) 2013 is licensed under CC BY-SA 2.0.
The US puts tariffs on imports.
Less than a month after becoming president, Donald Trump made a new rule. He added tariffs on products coming from Mexico, Canada, and China.
Trump wrote on social media that these tariffs will help protect American people from dangerous drugs and illegal [[immigration::The act of someone changing the country they live in forever.]].
Some reports say that tariffs could make prices go up. But Trump had promised to make things cheaper for people.
What are tariffs?
Countries do not make everything they need, so they buy and sell things from other countries. But [[trade::The activity of buying and selling or transferring products or services between persons or countries.]] is not always easy because of different rules, [[politics::Politics are the activities, actions, or policies used by governments or groups to influence or control choices.]], and competition.
A tariff is an extra [[tax::Money paid by people and companies to the government so that it can pay for public services such as roads.]] on things that come from another country. Governments use tariffs to control trade, make more money, and help local businesses.
In other words, tariffs make foreign products more expensive, so fewer people buy them.
Here’s an example: If the US adds tariffs on coffee from Brazil (the biggest coffee exporter in the world), coffee shops like Starbucks will have to increase their prices. Why? Because the coffee beans they buy from Brazil will cost more!
Canada, Mexico, and China respond.
These three countries are not happy with Trump’s decision. Canada and Mexico have added their own tariffs on US products.
China said it will make a complaint to the [[World Trade Organization::A global organisation that manages the rules of trade between nations.]] (WTO). It looks like a tariff war has started!
What is a tariff war?
A tariff war happens when countries add high tariffs on each other’s products.
Companies that buy these products must pay more money. But they increase prices for customers to cover this cost. So, things become more expensive for everyone.
If a tariff war lasts a long time, it can hurt businesses and jobs. When products cost too much, people stop buying them. This can slow down the [[economy::The process of buying and selling of goods and services by which a country makes money.]] and cause job losses.
Quick Revision
Donald Trump put extra taxes (tariffs) on goods from Mexico, Canada, and China.
Tariffs make things cost more because foreign products become expensive.
Canada, Mexico, and China replied with their own tariffs, starting a tariff war.
A tariff war raises prices and can hurt jobs and businesses.
