What's going on?

The US and China have been butting heads over trade recently #ClashOfTheTitans. Wednesday sparked further concerns among investors about a proper trade war� China reacted to the US�s latest import taxes (a.k.a. tariffs) with some of its own. And stocks reacted� negatively

What does this mean?

On Tuesday, President Trump announced that a range of goods imported into the US from China (largely focused on areas important to China�s growth like machinery and tech) would be subject to taxes. China didn�t take it lying down. The following day, they announced import tariffs on several products in major US sectors: aircrafts, cars and soybeans (what, �soybeans�?! Yes � they�re used in protein for animal feed, and of course, in soy sauce). They also increased tariffs on things like whiskey (think: sales of best-selling American champion Jack Daniel�s could suffer), cigars and tobacco.

Why should I care?

For markets: Investors are bracing for a war, but some economists think this is just a battle. (tweet this)


The apparent aggression on both sides spooked investors and stocks fell, particularly those in the sectors most likely to be impacted by a trade war. However, some economists believe this is just a battle, not a war. They could be right: both China and the US acknowledged that the timing and ultimate outcome of these tariffs depend on future negotiations.


For you personally: This could result in higher prices for your iPhone or Tesla (depending on where you live).

So far, the US has largely steered away from taxing major consumer sectors like clothes and shoes (although China�s opened that door with whiskey tariffs). So for the most part, the prices we pay for products shouldn�t change, right? Unfortunately, not necessarily. Companies whose products contain parts from China like Apple and Lenovo will face higher costs to produce iPhones and ThinkPad laptops, respectively. These costs may be passed on to you. Similarly, Chinese customers hoping to buy a Tesla may find the price has shot up.