The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • Submit an Article
  • Books
  • Categories
  • Coaching
  • Book Lynnette
  • Money Coach University™
No Result
View All Result
The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • Submit an Article
No Result
View All Result
The Money Coach
No Result
View All Result

What a Trade War With China Means For Your Money

Lynnette Khalfani-Cox, The Money Coach by Lynnette Khalfani-Cox, The Money Coach
in Personal Finance
Reading Time: 3 mins read
US China Trade War
10
SHARES
168
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

It’s official: the U.S. and China are formally locked in a high-profile trade war.

On Friday July 6, 2018, the U.S. hit China with tariffs on $34 billion worth of goods, mostly high-tech items, like aerospace and robotics products, as well as semiconductor chips for cars, computers, smart phones and TVs.

China then immediately levied a so-called “revenge” tariff, slapping the U.S. with an equal $34 billion in taxes on automobiles, crude oil and cash crops, such as soybeans.

Chinese officials called the U.S. a “trade bully” and accused the White House of starting the largest economic trade war in history.

Here’s an explainer on trade wars and what it all means for your money.

What is a trade war? 

Anytime one country increases taxes on another nation’s imports in order to protect its domestic industries, and the other nation retaliates by imposing its own tariffs, that can escalate into a trade war.

That is precisely what has happened here in 2018.

Ever since his election in 2016, United States President Donald Trump has asserted that the U.S. is getting the short end of the stick in regards to trade with China.

Trump cites the trade deficit – the U.S. bought $347 billion more in goods from China than it sold to it in 2016 – as proof of what he calls an “unfair” situation.

So by imposing tariffs on China, Trump hopes to make imported Chinese goods more expensive and therefore less appealing to American consumers.

Ultimately, Trump is betting that by raising taxes on Chinese goods and merchandise, those items will become less attractive to U.S. consumers, so they will instead buy American-made products, protecting domestic jobs and industries.

Will a trade war lead to higher consumer costs?

Most economists and other experts say it is very likely that a full-blown trade war between the U.S. and China will lead to higher prices for consumers.

For the Chinese items that the U.S. is now taxing, American companies will initially pay the tariffs when they import the goods.

But U.S. businesses will deal with those tariffs in one of two ways: by absorbing the cost themselves or, more likely, by passing the cost onto consumers.

The latter approach is far more likely since most big businesses are reluctant to cut into their profits.

So if U.S. companies do pass along those higher tariff costs to consumers, that inevitably means what the prices you pay for things like vehicles or cell phones will go up.

Potential Recession Risk

There is one other potential byproduct of a trade war: a national or even global recession.

President Donald Trump has said he plans to slap tariffs on $505 billion worth of Chinese goods. Observers say that would mean bad news for the American economy.

“If the President is true to his word and imposes tariffs on 500 billion dollars worth of Chinese exports,” a recession would be a real possibility, said former Director of Congressional Budget Office, Douglas Holtz-Eakin, speaking on CNN.

Nonetheless, on both the domestic and international fronts, Trump has consistently advanced a protectionist “America First” agenda on all matters economic and political.

But according to numerous economists, protectionist policies of the 1930s strongly worsened the Great Depression.

So if the Trump administration maintains its current position, it’s unclear how bad a potential recession could get.

Moreover, over time, trade wars reduce international trade and growth. They also exacerbate the risk of a global recession, since consumers in each nation have less disposable income to buy goods from other places and do things like travel abroad.

Tags: trade war
Previous Post

Splitting Up and Not Married – Whose Money is it Anyway?

Next Post

Beware of Fake IRS Collection Scam

Related Posts

Happy African Couple Doing Retire Finances Plan And Money Budget

How to Qualify for a Mortgage with Credit Card Debt and Self-Employment Income

by Lynnette Khalfani-Cox, The Money Coach

Discover the steps to qualify for a mortgage as a self-employed entrepreneur with credit card debt. Make homeownership a reality with our tips. #qualifyforamortgage #selfemployment #creditcarddebt

Cheerful black woman holding good credit score bank statement

An Easy Way to Report Rent Payments to Boost Credit

by Sponsored

When individuals report their rent payments to credit bureaus with Rentreporters.com, they can improve their credit scores and open up new financial opportunities. Whether they are looking to secure a loan, rent a new apartment, or build a strong credit history, Rentreporters.com can help. Their service is designed to be...

Lynnette Khalfani-Cox discussing the Silicon Valley Bank Collapse

The Silicon Valley Bank Collapse Explained: Video

by Lynnette Khalfani-Cox, The Money Coach

https://youtu.be/N_hSvQTZ63AI created this video to help my audience better understand the impact of the collapse of the Silicon Valley Bank and Signature Bank. Many of my followers have asked me why this happened, what was the cause of the failure, if their money is still safe, and why SVB gets a...

Warm toned portrait of black senior woman talking on phone while enjoying breakfast in morning

Beware Of These 30 Scams That Will Take Your Money

by Lynnette Khalfani-Cox, The Money Coach

Every year, the IRS and the Better Business Bureau (BBB) receive numerous complaints about fraudulent activities and financial scams. These scams can be devastating, causing people to lose their hard-earned money and personal information. It’s important to be aware of the top scams reported by the IRS and BBB to...

Happy Women's Day greeting card illustration. 3D papercut woman symbol with group of women from different cultures. Paper craft design for international womens event.

Celebrating International Women’s Day

by Lynnette Khalfani-Cox, The Money Coach

https://youtu.be/32K0nm-Id84International Women's Day is celebrated annually on March 8th to recognize the social, economic, cultural, and political achievements of women and to advocate for gender equality worldwide. The day is celebrated globally, and it serves as a call-to-action for women's rights and gender parity.The history of International Women's Day can...

Woman reads bad news in mobile message. Female sad looking at smart phone feels shocked. Business woman worried from investment losses. Customers are not happy with the internet connection speed.

10 Ways to Avoid an Overdrawn Bank Account

by Lynnette Khalfani-Cox, The Money Coach

Finding out that you have an overdrawn bank account is never a pleasant experience. Not only can it be embarrassing, but it can also result in costly fees. The average overdraft fee in the U.S. is around $30. To avoid this situation, here are 10 ways to prevent overdrawing your...

Updating Your Resume

Updating Your Resume to Get a Higher Salary Job

by AskTheMoneyCoach

Updating a resume is something you should do regularly, even if you’re not planning to leave a job soon. It’s important to review it occasionally since the world is changing, as does the corporate environment. Therefore, your job application documents might be outdated once you have to use them.  Additionally,...

Load More

Popular Posts

  • Car repair

    What to Do If You Can’t Afford a Car Repair Bill

    1388 shares
    Share 555 Tweet 347
  • What to Do if Your Spouse Stole Money From You

    1177 shares
    Share 471 Tweet 294
  • What to Do If You Can’t Afford to Leave Your Spouse

    1114 shares
    Share 446 Tweet 279
  • Here’s Why I Pay My Kids For Good Grades (And Maybe You Should Too)

    1020 shares
    Share 408 Tweet 255
  • What Do All Those Strange Codes In My Credit Report Mean?

    821 shares
    Share 328 Tweet 205
  • Do This Now If Your Wages Were Not Reported

    754 shares
    Share 301 Tweet 188
  • How to Find Out if a Debt Collector is Licensed to Collect Your Debt

    734 shares
    Share 294 Tweet 184

All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.

©2009-2023 TheMoneyCoach.net, LLC. All Rights Reserved.

RSS / Sitemap /Submit an Article / Privacy Policy / LynnetteKhalfaniCox.com

No Result
View All Result
  • Books
  • Categories
  • Contact Lynnette
  • Get Coaching
  • Book Lynnette
  • Money Coach University™
  • Home
  • Subscribe to Newsletter
  • Submit an Article

©2009-2021 TheMoneyCoach.net, LLC. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist