GAME OF CHICKEN
What’s at stake in China-US trade dispute
The US and China have the world’s biggest trading relationship. That gives them an incentive to reach a settlement to avoid damaging many businesses on both sides. Exports to China directly or indirectly supported 1.8 million new US jobs in 2015. Chinese tariff hike targeted goods including soybeans, the biggest US export to China, and aircraft The latest tariff dispute strikes at the heart of technology industries China’s leaders consider vital for its economic future. Chinese factories assemble most of the world’s smartphones, computers and consumer electronics But Beijing wants to capture more of the profits by becoming a creator of technology instead of a low-cost factory Washington is trying to promote technology exports to offset its imports from China and support higher-paying jobs.
What’s likely to come next?
Chinese officials have acknowledged their country has more to lose in a full-blown conflict with Washington but say they will endure the cost Beijing has options for retaliating against US companies operating in China. Regulators could withhold licenses or alter other conditions to hamper foreign business activity Washington could target state-owned enterprises that dominate industries including energy, telecoms and banking