Tariffs & Trade Wars
What is a tariff?
A tax imposed on an imported good/service
When did the US/China trade war officially begin?
2018
What is the WTO and what do they do?
World Trade Organization, oversees and regulates international trade between nations
What is a trade deficit?
When a country imports more than it exports
What do companies change when they want to avoid tariffs and rely less on one country?
They change their suppliers
What is the purpose of a tariff?
To protect domestic industries and generate government revenue
What was one primary reason the US initiated the trade war in 2018 with China?
To respond to Chinese policies on intellectual property and forced technology transfers
Who sets U.S. trade policy?
The President and Congress, with input from the U.S. Trade Representative
What effect do tariffs have on consumer choice?
Tariffs reduce access to foreign products, limiting variety and competition
What do leaders need to balance when making trade decisions?
Economy & Relationships
What is a trade war?
A conflict where countries impose tariffs on each other in response to trade disputes
Name one effect of tariffs on US consumers
Higher prices on imported goods like electronics, clothing, and furniture
How do tariffs affect international relations?
They can strain alliances or lead to retaliation
How do tariffs affect small businesses?
They raise costs and reduce competitiveness
What global financial market often reacts to trade war news with volatility?
stock market
What are the three core types of tariffs?
Specific, Ad Valorem, Compound
What goods were first targeted in the trade war?
Electronics, machinery, and steel
How do tariffs reflect political values?
They can signal protectionism, nationalism, or economic strategy
What is supply chain diversification?
Sourcing from multiple countries to reduce dependency
What do countries want to protect when they raise tariffs?
Their own companies
What strategy do companies use to avoid tariffs by relocating production to other countries?
Offshoring
What is the China+1 strategy
A business approach where companies keep operations in China but add another country to diversify risk
What is one institutional impact of the U.S.–China trade war?
Global trade shifted from rule-based multilateralism to deal-based bilateralism
What long-term risks do tariffs pose to global economic stability?
They can trigger trade wars, disrupt supply chains, and reduce international cooperation
What country benefited from companies shifting production away from China?
Vietnam