After months of negotiations, China and the US are on the brink of an all-out trade war. On Friday, the US unveiled a list of $50bn in Chinese goods to target with 25% tariffs, pledging more duties if China retaliated.

Within hours China released its own list of retaliatory tariffs to place on $50bn in US imports. China’s proposed tariffs on more than 500 categories of US goods, a list more extensive than the one it released in April, appear aimed at hurting Trump’s Republican base before the US midterm elections in November. The list includes beef, poultry, pork, dairy products, seafood, tobacco and soybeans. China is the largest buyer of US soybeans. Beijing said it would also target $16bn of US products like coal, crude oil, natural gas, and medical equipment at a later date.

Chinese state media has attacked the White House for escalating the prospect of a trade war, calling the administration of president Donald Trump “selfish” and “rude” and “mundane” in its capriciousness.

The situation could still escalate further. In response to China's retaliation, this morning President Trump has threatened additional tariffs on China to the tune of $200bn.

Bad behaviour aside, Chinese state media is still leaving room for the possibility of negotiations. “Given the frequent flip-flopping of the Donald Trump administration, it is still too early to conclude that a trade war will start,” said an English-language editorial in the China Daily.

By contrast, US Secretary of State Mike Pompeo's comments today leave little room for polite discourse, labelling China's trade practices as a 'joke, 'predatory' and bordering criminal.

While the economic damage of the tariffs announced so far shouldn't be too big in the scheme of things, this could quickly change. We'll keep you posted.

Rick Maggi