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The US-China trade war just got even uglier

First published: Prospect 14/05/2019

Barely a couple of weeks ago, President Trump referred to the prospect of “an epic trade deal,” describing the negotiations between the US and China to bring an end to the trade war.

Yet last Friday, with Chinese negotiators in Washington, Trump authorised a hike in punitive tariffs on Chinese goods, which was originally set for 1st January but was put into the deep freeze pending the outcome of these talks.

Over the weekend, Trump said that the US would publish a plan to extend such tariffs to the half of imports from China not yet affected, taking effect in a month if the talks make no progress. The Chinese delegation has gone home, and there may yet be a twist that allows a weak agreement to push back a full-scale trade war. The optics, though, are not good. How worried should we be? Read on ….