The world's two largest economies are locked in a bitter trade battle.

What tariffs have been imposed?

Mr Trump's tariffs policy aims to encourage consumers to buy American by making
imported goods more expensive.

So far, the US has imposed tariffs on more than $360bn (£268bn) of Chinese goods,
and China has retaliated with tariffs on more than $110bn of US products.
Washington delivered three rounds of tariffs last year, and a fourth one in
September. The most recent round targeted Chinese imports, from meat to musical
instruments, with a 15% duty.

Beijing has hit back with tariffs ranging from 5% to 25% on US goods.

Its latest tariff strike included a 5% levy on US crude oil, the first time fuel has been hit
in the trade battle.
What's next?
The so-called "phase one" deal agreed in December reduces some US tariffs in
exchange for more Chinese purchases of American products, and better protection for
US intellectual property.
 Trump escalates trade war with fresh tariff hikes
 US delays some tariffs on Chinese imports

The deal is yet to be signed and tariffs of 25% on $250bn worth of Chinese goods
remain in place.

However, the US will drop tariffs on $120bn worth of Chinese goods to 7.5%.

Washington also shelved a planned round of tariffs, which would have hit Chinese
smartphones, clothing and toys.

US President Donald Trump vowed to more than double tariffs on $200bn (£153bn) of
Chinese goods on Friday and to introduce fresh ones "shortly".

Despite this, the Chinese are starting two days of negotiations with the US.

The US president's threat to raise tariffs comes amid claims Beijing is trying to row back
on a trade deal.

The world's two largest economies have already imposed duties on billions of dollars
worth of one another's goods.

A further escalation in the trade dispute would create renewed uncertainty for
businesses and consumers, hurting the world economy.
 Trump threatens to hike China tariffs
 The next US-China battleground
 US-China trade war in 300 words

Here are some of the central issues in the US-China trade dispute:

1) How has the US trade deficit grown?

The US, which accuses China of unfair trading practices, launched a trade war against
China last year.

Not only does the US accuse China of stealing intellectual property, but it wants Beijing
to make changes to its economic policies, which it says unfairly favour domestic
companies through subsidies.
The US also wants China to buy more US goods to rein in its lofty $419bn (£321.2bn)
trade deficit with China.

The trade deficit is the difference between how much the US imports from other
countries and how much it exports. Reducing the gap is a key part of Mr Trump's trade
policies.

2) What tariffs have been imposed so far?

The US imposed tariffs on $250bn worth of Chinese products last year. Beijing has
retaliated with duties on $110bn worth of American products.

Tariffs on $200bn worth of Chinese goods were due to rise to 25% from 10% at the start
of this year, but this hike was delayed.
Now, Mr Trump is saying this increase will go ahead on Friday because talks with
Beijing are progressing "too slowly".
On top of that, he has vowed to slap 25% duties on another $325bn of Chinese
goods "shortly".

3) What products could be affected?

The Chinese products hit by US tariffs since the beginning of the trade war have been
wide-ranging, from machinery to motorcycles.
In the latest round, the US imposed 10% duties on $200bn worth of Chinese
products including fish, handbags, clothing and footwear.

Those products will be the ones targeted with a tariff hike from 10% to 25%, if it goes
ahead this week.
China accuses the US of starting the biggest trade war in economic history. It has
targeted US goods ranging from chemicals, to vegetables and whiskey.
It has also strategically targeted products made in Republican districts, and goods that
can be purchased elsewhere, like soybeans.

4) Has the trade war hit the markets?

The US-China trade war has been a great source of uncertainty for financial markets
over the past year. That uncertainty has weighed on investor confidence around the
world, and has contributed to losses.

In 2018, Hong Kong's Hang Seng index fell more than 13% and the Shanghai
Composite slumped nearly 25%.

Both indices have recovered some ground this year and are up 12% and 16%
respectively so far in 2019.
By comparison, the Dow Jones Industrial Average fell nearly 6% in 2018 and is already
up some 11% this year.

The yuan fell over 5% against the US dollar last year, before broadly stabilising in 2019,
according to Reuters.

5) What other trade battles are going on?

The US-China trade war has had a knock-on effect on other countries, and the global
economy.

The International Monetary Fund (IMF) said the escalation of US-China trade tension
was one factor to have contributed to a "significantly weakened global expansion" late
last year as it cut its 2019 global growth forecast.

Some countries may also be indirectly impacted - especially those that are important
trading partners for the US or China - or play key roles in their supply chains.
The battle with China is one of a series of trade fights the US has waged with other
countries over the past year.

Mr Trump has imposed taxes on imports from Mexico, Canada and the European
Union, to encourage consumers to buy American products. All of these countries
retaliated with tariffs on US goods.

China lodges WTO tariff case against the US

China has lodged a complaint against the US over import tariffs affecting US$300 billion
of Chinese exports, according to an announcement made by China’s Ministry of
Commerce. This is the third lawsuit that China has brought to the WTO challenging US
tariffs against Chinese imports.
Under WTO rules, Washington DC has 60 days to try to settle the latest dispute. The
US previously published a written defense for the first of the three legal cases brought
by China, asserting that the current set of tariffs should not be judged at the WTO.

UNCTAD

Evolution of the US-China Trade War

Trade war is a global warning

“The results of the study serve as a global warning; a lose-lose trade war is not only harming the
main contenders, it also compromises the stability of the global economy and future growth,” said
UNCTAD’s director of international trade and commodities, Pamela Coke Hamilton. “We hope a
potential trade agreement between the US and China can deescalate trade tensions.”