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A quick guide to the US-China trade war


(2018-10-30)
 

The world’s two largest economies - the US and China - are locked in an escalating trade battle.

US President Donald Trump had been complaining about China’s trading practices even before he took office in 2016.

That year he said China engaged in the "rape" of the US economy, and since then he has aggressively targeted Beijing as part of his broader America First agenda.

In 2017, the US launched an investigation into Chinese trade policies and has steadily imposed tariffs on Chinese products from this year.

So far, the US has imposed three rounds of tariffs on Chinese goods, totalling more than USD 250bn. They cover a wide range of consumer and industrial items including handbags, rice and railway equipment.

The duties range from 10% to 25%. Mr Trump has since threatened to hit another USD 267bn worth of goods - meaning all Chinese imports could be subject to tariffs.

The US has also put tariffs on worldwide imports of goods like steel and washing machines, which further affects products from China.

Beijing has struck back. It’s accused the US of starting "the largest trade war in economic history" and imposed tariffs on USD 110bn worth of American goods.

China’s list of products subject to levies - which range from 5% to 25% - includes chemicals, coal and medical equipment. The moves have been strategic, targeting products made in Republican districts, and goods - like soybeans - that can be purchased elsewhere.

Tariffs, in theory, make US-made products cheaper than imported ones, and encourage consumers to buy American.

Already there are signs of economic strain.

Both US and international firms have said they are being harmed.

The IMF warned a full-blown trade war would weaken the global economy.

 
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