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A quick guide to the US-China trade war A quick guide to the US-China trade war
(about 2 months later)
The US and China are locked in an escalating trade battle. The US and China are locked in a bitter trade battle.
US President Donald Trump has complained about China's trading practices since before he took office in 2016.US President Donald Trump has complained about China's trading practices since before he took office in 2016.
The US launched an investigation into Chinese trade policies in 2017. It imposed tariffs on billions of dollars worth of Chinese products last year, and Beijing retaliated in kind.The US launched an investigation into Chinese trade policies in 2017. It imposed tariffs on billions of dollars worth of Chinese products last year, and Beijing retaliated in kind.
After months of hostilities, both countries agreed to halt new trade tariffs in December to allow for talks. Both countries agreed to halt new trade tariffs in December to allow for talks. But hope for a deal faded, and further tit-for-tat tariffs were imposed.
Optimism had grown over the prospect of a deal, but that faded, and now the US has more than doubled tariffs on $200bn (£153.7bn) worth of Chinese products.
Beijing retaliated three days later with tariff hikes on $60bn of US goods.
What tariffs are in place?What tariffs are in place?
Last year, the US imposed three rounds of tariffs on more than $250bn worth of Chinese goods.Last year, the US imposed three rounds of tariffs on more than $250bn worth of Chinese goods.
The duties of up to 25% cover a wide range of industrial and consumer items - from handbags to railway equipment. The duties of up to 25% cover a wide range of products, from handbags to railway equipment.
Beijing hit back with tariffs on $110bn of US goods, accusing the US of starting "the largest trade war in economic history". China hit back by imposing tariffs ranging from 5% to 25% on $110bn of US products including chemicals, coal and medical equipment.
China has targeted products including chemicals, coal and medical equipment with levies that range from 5% to 25%. A truce agreed last December collapsed and in May the US raised tariffs on $200bn of Chinese products to 25% from 10%. Again China retaliated with tariff on $60bn of US goods.
It has also targeted products made in US districts with strong support for the Republicans, and goods that can be purchased elsewhere, such as soybeans. The US began planning to hit an additional $300bn of Chinese goods but, at the G20 in Japan in June, Mr Trump called that off and said he would continue to negotiate with Beijing "for the time being".
After agreeing a truce in December, both sides began to talk.
But on Friday the US raised tariffs on $200bn of Chinese products to 25% from 10%. China retaliated but officials say the countries are still talking.
The US has also started the process for hitting an additional $300bn of Chinese goods with tariffs.
Why tariffs?Why tariffs?
Tariffs imposed on Chinese goods, in theory, make US-made products cheaper than imported ones, and encourage consumers to buy American. They are also increasingly seen as a negotiation tactic in the trade war.Tariffs imposed on Chinese goods, in theory, make US-made products cheaper than imported ones, and encourage consumers to buy American. They are also increasingly seen as a negotiation tactic in the trade war.
What is the impact so far?What is the impact so far?
Both US and international firms have said they are being harmed.Both US and international firms have said they are being harmed.
Fears about a further escalation have rattled investors and hit stock markets.Fears about a further escalation have rattled investors and hit stock markets.
The IMF warned a full-blown trade war would weaken the global economy.The IMF warned a full-blown trade war would weaken the global economy.