👉 Background: Donald Trump won the US election in early November and since then, he’s started to give some not-so-subtle hints on his plans while in office — like appointing Elon Musk to a new department for government efficiency - called DOGE and cut the corporate tax rate to 15%.

👉 What happened: But now, Trump has warned that he’ll also be whacking some major tariffs on some of the US’ biggest trading partners:

• A 25% tariff on Canadian and Mexican products if they don’t stop the flow of migrants and illicit drugs across the US borders
• A 10% tariff on Chinese products if they don’t stop the trafficking of fentanyl into the US
  

👉 What else: Trump warned that these tariffs will remain in place until they listen to his demands. But, the Mexican president has said that she’ll hit the US with its own tariffs. And this is starting to smell a little bit like a trade war.

What's the key learning?

💡A trade war happens when countries impose tariffs or other restrictions on each other’s goods. t’s kinda like an economic tug-of-war, where each side tries to gain the upper hand.

💡While this might seem like a way to protect a country’s own industries, the real losers are often the consumers. For example, the US purchases $920 billion USD worth of goods from Mexico and Canada each year.

💡So if the tariffs are raised, you can bet that retailers will be passing those costs onto consumers - who will be the ultimate losers here.