While Washington led by Trump declared an uninsured trade war on the world, armed the prices, the world markets have turned into a financial port in Pearl – if not on September 11.
The fatal chain reaction of losses that has suffered billions of markets is just beginning – you would better complete because more shocks are in store as the conflict becomes on a large scale.
All of this followed the Crusade (Mata) of American President Donald Trump, the crossroads of the great prices “(Mata), releasing a burst of economic terms which made the headlines and left the uninitiated and non -economic types, scratching their heads with wonder.
Here is a simple language guide for what they mean and why they count.
Price
This term is all the rage these days. It is a regular customer in global trade and has always been there. By definition, prices are border taxes on imports, imposed specifically to protect the non -competitive local industries in a country.
Under Trump, the reciprocal rates or struck by tit-for-tat meant to match foreign prices with identical American prices-essentially “you tax us, we tax you”. Reprisal rates are recovery rates: if a country imposes prices, the other responds in kind.
Trade war
A trade war occurs when the countries slam the prices on each other in a tit-form concerning unfair practices. It is an economic tug. The American -Chinese trade war is a key example – since 2018, prices have increased, some reaching 145%.
Trade deficit and surplus
A trade deficit means that a country matters more than it exports – like the United States with China, where it buys more than it sells. A surplus is the opposite: the United States is sold more in the Netherlands than they matter, creating a commercial surplus.
Grants
Governments grant subsidies to help industries compete. For example, after the 25% price of Trump on foreign cars, South Korea stimulated subsidies to electric vehicles to protect its automotive sector.
Stock market
The stock market is where the company’s shares are negotiated. If you have Amazon actions, its price changes can mean gains or losses.
Key indices:
- S&P 500 (500 best companies)
- Nasdaq (Tech-Heavy)
- Dow Jones (30 large companies)
The Fed
The Federal Reserve (the Fed) is the American central bank. It controls the money supply, adjusts interest rates and maintains the stable economy.
Interest rate
These are the costs of the loan. Higher rate = more expensive loans. Lower prices = cheaper loan. Central banks increase rates to slow down inflation or cool the economy.
Inflation
Inflation means the rise in prices over time. If a $ 2.50 sandwich now costs $ 3.00, it is an inflation of 20%. It can be caused by the rise in demand, increase in production costs or printing too much money. The Fed uses rate increases to control it.
Exchange rate
It is how a currency is a currency in relation to another. For example, 1 US dollar = 0.90 euros. Strong currencies make imports cheaper, while weakness increases exports.
Market trends
Market trends show a price management – up, down or stable.
- Haussier market: price increase, investor confidence
- Bears market: lower prices, prudence of investors
A 20% movement in the S&P 500 often indicates a change in trend.
Debt
The debt is borrowed from the money that a country must reimburse with interest. The United States sells cash obligations to countries like China. In March 2025, the American debt amounts to 36.56 billions of dollars, which raised concerns about future financial stability.
Commercial agreements
These are agreements to facilitate trade between nations.
- Free trade agreements (FTA) remove the barriers
- Bilateral agreements define mutual trading rules
GDP
The gross domestic product (GDP) measures the total value of the goods and services produced. It is a key indicator of the economic health of a country.
Recession
A recession represents two quarters of GDP in narrowing. It causes job losses, lower expenses and a decrease in stocks. The United States has had 11 recession since 1950.
Types of trade policies
Protectionism limits trade to protect local industries through prices, grants or quotas. Free trade promotes open markets, often increasing the growth, variety and choice of consumers.
Foreign leaders have perplexed how to respond to the greatest disturbance in the world trade for decades. Trump’s administration was held to his arms, praising discussions on several commercial transactions which, according to him, will justify his dramatic upheavals in politics.
The Tit-For-Tat rate increased by the United States and China to make the goods trade between the two largest economies in the world impossible, according to analysts. This trade was worth more than $ 650 billion in 2024.
“The president was very clear: when the United States is struck, he will recover stronger,” the white house press secretary Karoline Leavitt said on Friday.
This week, Trump announced a 90 -day price break on dozens of countries while folding the tariffs on Chinese imports at 145%.
Friday, China retaliated with new prices. The Chinese finance ministry called Trump’s prices “bullying and completely unilateral coercion”.
Beijing said it would be the last time he corresponded to the American prices but left the door open to other types of reprisals.