Trump’s tariff war with China is just getting started

Over the weekend, Donald Trump described his sweeping 10 per cent tariffs against Chinese goods as an ‘opening salvo’. Within minutes of them taking effect at midnight last night, Beijing retaliated with targeted tariffs of its own against US coal, liquified natural gas (LNG), farm equipment and cars. It also announced export controls on a string of critical minerals to ‘safeguard national security’, and what it described as an ‘anti-trust’ investigation into Google. Like most Western internet and social media firms, Google is already banned from China, but earns money from Chinese businesses advertising abroad.

In spite of the ‘trade war’ headlines, stock markets and many analysts are surprisingly sanguine. China’s measures are ‘fairly modest, at least relative to US moves, and have been calibrated to send a message to the US,’ said Julian Evans-Pritchard, the head of China Economics in a note.