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What’s really at stake in the trade war between the US and China?

After a weekend during which leaders in the United States and China promised to impose stiff new tariffs on each other’s goods—only to show signs of reversing those threats days later—the trade war between the countries with the world’s largest two economies seems to have cooled, for now.

The tariffs that U.S. President Donald Trump and Chinese President Xi Jinping imposed upon each other’s countries likely won’t have had a huge effect on either economy, according to William Dickens, an economics professor at Northeastern University. But, he says, the political brinkmanship behind this trade war of words could.

Earlier this month, Trump imposed a 10 percent tax on $300 billion worth of Chinese goods. On Friday, the Chinese State Council retaliated, announcing that it would impose new tariffs on $75 billion worth of U.S. goods, and resume the tax on American cars. Trump raised the stakes again just 12 hours later, bolstering the existing tariffs on $250 billion worth of Chinese goods, and raising the new 10 percent tax to 15 percent. Trump also ordered U.S. companies that do business or are located in China to pull out of the country.

Read the full story on News@Northeastern.

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