US-China trade war – the levers they can pull

US-China trade war - the levers they can pull

The trade war between the United States and China has gone beyond tariffs as the countries increase pressure on each other to cede ground.

U.S. President Donald Trump and Chinese President Xi Jinping will meet at the G20 summit in Japan later in June. Trump said negotiations to end a trade war would restart ahead of the summit, ending a six-week hiatus since talks broke down in early May.

Since then, the relationship between the two countries has deteriorated. Beijing has threatened retaliation after Trump blacklisted Chinese telecom giant Huawei and as the United States prepares to extend tariffs to cover almost all Chinese imports.

The prospect of a meeting that may defuse tension at the G20 has given financial markets worldwide a lift. But Trump has previously warned that he may go ahead with a new round of tariffs if the meeting does not result in progress on trade.

Chinese state media has warned that Beijing could use rare earths for its next strike in the trade war. The United States relies on China for supplies of the rare earths to make a host of high-tech products, from satellites to electric car batteries.

Here are some other possible pressure points for each side.


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