The trade war between America and China has been ongoing for a while now, however, there has been a recent escalation between the two countries and it doesn’t look like either leaders are backing down.
President Donald Trump’s latest round of tariffs on roughly $200 billion worth of Chinese goods kicked in on Monday, bringing the total amount of Chinese goods faced with tariffs up to approximately $250 billion. In response, Beijing slapped tariffs on another $60 billion worth of US goods.
The new tariffs will likely push up prices for US businesses and consumers, according to economists, while also weighing on consumer confidence. It is unclear the degree to which the inflation would weigh on the broader US economy, but most experts expect the tariffs to be somewhat of a drag on growth.
The news website Axios also reported Sunday that the Trump administration plans to begin a public-relations campaign attacking the Chinese on security issues. According to the report, the US will highlight Beijing’s alleged attacks, ranging from election interference to intellectual property theft.
Isaac Boltansky, a policy analyst at the research and trading firm Compass Point, said the broadside against China and continued threats of tariffs could trigger a more forceful response from Beijing.
While Trump and Chinese President Xi Jinping are not expected to speak at this week’s meeting of the UN General Assembly, there is a chance talks could resume in the coming months during the Asia-Pacific Economic Cooperation and G20 summits.
Any talks would be encouraging, according to Chad Bown, a senior fellow at the Peterson Institute for International Economics. But he said that Trump’s lack of a clear goal for the trade war — outside of vague assertions about the trade deficit — raises the likelihood that the negotiations could be fruitless.
Chris Krueger, a strategist at Cowen Washington Research Group, said Trump’s lack of direction means the president is likely to fall back on his decades-long preference for trade protectionism — further exacerbating the situation.
As both leaders continue to threaten, it looks increasingly unlikely that China and America will strike a trade deal. It looks like the feud between Trump and Xi Jinpig will continue until one of them makes the next step but it’s a waiting game now.