The Trade War Part: Two

USA and Mexico, recently sat down and struck a deal, nearly starting a tariff war in the process. (Tariff is the tax charged on the import or export from one country to another, otherwise known as custom duties.)

This was mainly due to the influx of illegal migrants across the border of Mexico to Central America. Trump has said that these migrants steal jobs of the American citizens. The other reason for this was due to the fact that Mexico exported a lot more goods than USA did, causing a surplus for USA and a deficit for Mexico (surplus – excess amount of export in the country. Deficit- less amount of export in the country.).

The two countries agreed that if Mexico increased the amount of patrolling on its borders, making it harder for illegal immigrants to cross over, USA would stop the tariff that they had threatened to add on to the export (5%). However, if this deal had not gone through, USA would be left fighting a trade war against one of its three largest trading partners (not for the first time! Read more on – The Trade War). This would also contribute to the slowing down of world economy.

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