The first blow to the new trade conflict between China and the United States came on Monday, when Beijing's tariffs on about $14 billion worth of U.S. imports went into effect, according toCNN's Simon McCarthy.The tariffs, which include tariffs on crude oil, liquefied natural gas and some cars and vehicles, came a week after U.S. President Donald Trump imposed 10% tariffs on hundreds of billions of dollars in annual Chinese imports. There had been hopes that a phone call between Trump and Chinese leader Xi Jinping could avert an escalation of hostilities that could lead to a broader trade war, but that conversation never materialized.
The question for both sides now is what comes next. And how far are each of the world’s two largest economies willing to go in their deeply integrated commercial and trade ties? For now, even after the initial backlash, both sides appear to be leaving breathing room for a possible deal.
“Beijing has reacted with restraint to Trump’s new tariffs. Both because the impact on China is modest and because Xi wants to leave room for negotiations with Trump,” said Andy Rothman, CEO of Sinology, a consulting firm.
