Hello! Today we will learn about trade wars using simple English words. First, let's understand what trade is. Countries are like big friends. They buy and sell things to each other. For example, China sells toys to America, and America sells airplanes to China. This buying and selling between countries is called trade.
Now, let's learn what a tariff is. Sometimes, one country says to another: 'If you sell me your toys, you must pay me extra money.' This extra money is called a tariff. For example, if a toy from China costs 5 dollars, America might add a tariff of 3 dollars. Now the toy costs 8 dollars in America. This makes toys more expensive for people in America.
Now, what is a trade war? A trade war happens when two or more countries put tariffs on many things they buy from each other. For example, America puts tariffs on toys from China, and then China puts tariffs on airplanes from America. It's like they are having a fight, but they use tariffs instead of fists! This is called a trade war.
Why do countries have trade wars? There are a few reasons. First, one country might think the other country is not being fair in trade. Maybe they think the other country is selling things too cheaply, or not buying enough of their products. Second, countries want to protect their own businesses and workers. They want people to buy things made in their own country, not from other countries. This helps local factories and workers.
What happens in a trade war? First, things from other countries cost more money because of tariffs. For example, toys from China might cost 10 dollars instead of 5 dollars in America. And airplanes from America might cost 200 million dollars instead of 150 million in China. Second, countries stop buying and selling so much because things are too expensive. China buys fewer airplanes, and America buys fewer toys. Third, people and businesses in both countries feel not happy. Workers might lose jobs, and people have to pay more for things they want to buy. In a trade war, everyone loses.