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A quick guide to the US-China trade war A quick guide to the US-China trade war
(2 months later)
The US and China are locked in a bitter 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. Over the past year, the world's two largest economies have imposed tariffs on billions of dollars worth of one another's goods.
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. US President Donald Trump has long accused China of unfair trading practices and intellectual property theft.
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. In China, there is a perception that the US is trying to curb its rise.
What tariffs are in place? Negotiations are ongoing but have proven difficult. The two sides remain far apart on issues including how to roll back tariffs and enforce a deal.
Last year, the US imposed three rounds of tariffs on more than $250bn worth of Chinese goods. The uncertainty is hurting businesses and weighing on the global economy.
The duties of up to 25% cover a wide range of products, from handbags to railway equipment. What tariffs have been imposed?
China hit back by imposing tariffs ranging from 5% to 25% on $110bn of US products including chemicals, coal and medical equipment. Mr Trump's tariffs policy aims to encourage consumers to buy American by making imported goods more expensive.
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. So far, the US has imposed tariffs on more than $360bn (£296bn) of Chinese goods, and China has retaliated with tariffs on more than $110bn of US products.
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". Washington delivered three rounds of tariffs last year, and a fourth one in September. The latest round targeted Chinese imports, from meat to musical instruments, with a 15% duty.
Why tariffs? Beijing has hit back with tariffs ranging from 5% to 25% on US goods.
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. Its latest tariff strike included a 5% levy on US crude oil, the first time fuel has been hit in the trade battle.
What is the impact so far? What's next?
Both US and international firms have said they are being harmed. Both sides have threatened to take more action with new tariffs and hikes to existing duties in the coming months.
Fears about a further escalation have rattled investors and hit stock markets. On 1 October, the US plans to raise an existing 25% tariff on some Chinese products to 30%.
The IMF warned a full-blown trade war would weaken the global economy. Washington then plans to deliver a wave of new tariffs on Chinese goods, ranging from footwear to telephones, on 15 December.
If this happens, effectively all Chinese goods imported to the US will be subject to tariffs.
China also plans to hit another 3,000 American products with tariffs by the end of the year.