Eugenia Fabon Victorino, head of Asia strategy at SEB’s Singapore branch, analyses the recent developments in the US-China trade war.

Upping the ante, on 18 September the US imposed higher tariffs on an additional US$200 billion of imports from China. This comes on the back of earlier tranches of tariffs on US$50 billion of goods. In this latest round, an initial 10 per cent rate was implemented on 24 September, before rising to 25 per cent by 1 January 2019 (Chart 1). What started with US tariffs on washing machines and solar panels at the start of the year now covers almost half of all imports from China. In retaliation, China slapped similar rates of tariffs on a further US$60 billion of US imports. Subsequently, China pulled out of proposed trade talks with Washington a day after both sides imposed fresh tariffs on each other.

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