Reader:: China

The trade war between the United States and China just got a lot bigger after both sides announced their broadest waves of tariffs yet.

The latest exchange of fire means the two economic superpowers will soon have imposed tariffs on more than 360 billion of goods. And analysts say the batter is likely to get worse, even as China starts to run low on ways to retaliate.

The new tariffs announced by Washington and Beijing this week `make a major escalation of their conflict that will hit global economic growth’, Louis Kuijs, head of Asia Economics at research film Oxford Economics, said in a note.

What does China do next?

China had already gone blow with the United States on tariffs on more than 50 billion of each other’s goods this year. But its options for responding further are getting increasingly complicated.

The White House warned Monday that it would respond to any retaliation from Beijing with yet more tariffs on roughly 267 billion of Chinese exports. That would mean the US measeres effectively cover all the goods China sells to the US each year (the total for 2017 was about 506 billion).

China has a smaller target to aim for in response: it bought around 130 billion of US products last year, according to US government figures.

Beijing’s Very Difficult’ decision

Analysts have suggested that after Beijing runs out of US goods to target, it could go after major American companies that do business in China, such as Apple and Boeing.

China has a track record of such behavior, including making life difficult for South Korean firms because of a political dispute last year with South Korea’s government over a US missile defense system.

Some Us companies operating in China have already reported increased hurdles, including delays at customs and more inspections by regulators.

But uncertainty remains over whether Chinese leaders will aggressively pursue that approach on wide scale- by encouraging consumer boycotts of US brands or disrupting supply chains.