Kiplinger

What's a Trade War? The Arguments For and Against Protectionism

You've probably heard about this in the news, and you may be wondering: What is a trade war, and why should I care?

The Chinese president stepped back from the brink of a possible trade war with the U.S. on April 10 by pledging to open up his country's markets to foreign investment. But even as the rhetoric tones down, the threat of a trade war still lingers. And trade wars can have big -- and sometimes unexpected -- consequences for investors and consumers.

You saw one of them already: the Dow dropped 572 points on April 6. Investors worry about protectionist trade policies because they can raise prices on everything from soup cans to cars. Not only that, trade wars can cost jobs, damage industries, and even slow down the economy as a whole.

In this article I'll introduce you to some of the basics of trade, trade wars -- and the arguments for and against protectionism.

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