Fears over USA-China trade war

A trade war may break out between the USA and China. Stock markets in Asia fell on Friday because investors are worried. U.S. President Donald Trump plans to hit Chinese companies with trade tariffs. A tariff is a tax on goods and services coming in from other countries. President Trump said he would issue tariffs on up to $60 billion of Chinese imports. China said it would issue its own tariffs in reply. Tokyo's Nikkei share index fell by more than 4 per cent on Friday. Markets in Shanghai and Seoul fell by 3 per cent. There was also a fall on New York's Wall Street stock exchange.

World trade experts are worried that the tariffs could start a global trade war. A researcher said: "If the tariffs go ahead…China will retaliate. It is impossible to imagine that they cannot. And then we expect the U.S. to retaliate further. This can turn ugly on a global scale very quickly." President Trump wants to protect U.S. workers and companies. He is not happy with the trade imbalance with China. The USA buys $385 billion more goods from China than China buys from the USA. Trump wants to reduce this imbalance by $100 billion with his tariffs.