Everything You Need to Know About the Trade War

(Bloomberg) -- A global trade war is increasingly turning from talk to reality as U.S. President Donald Trump’s administration prepares to impose tariffs on $34 billion of Chinese imports and Beijing vows to retaliate.

This may prove to be only the opening salvo as Trump is also considering slapping a 10 percent tariff on an additional $200 billion of Chinese imports, and even more if Beijing hits back. He’s already imposed tariffs on the steel exports of some countries and is eyeing a 20 percent levy on car shipments from the European Union.

Here is a collection of recent analysis from Bloomberg reporters and economists about what the face-off means for economies, markets, politics and companies.

Tough Talk Turns Into Tariffs in Trade-War Evolution: Timeline

The trade war between the U.S. and the rest of the world is upon us, as tensions continue to rise amid a barrage of presidential tweets and new tariff orders.

President Donald Trump is betting Beijing will blink first in the showdown over tariffs. Such an outcome is far from assured -- and it could also take a while.

Economists see a risk that the world is headed toward an all-out trade war, one the World Trade Organization may be ill-equipped to respond to.

Picking a fight with a trading partner seems like a bad idea, but it’s not necessarily irrational. Probing a partner’s weaknesses can be an effective way to get a better trade deal, according to game theory, the branch of mathematics that deals with strategy.

The escalating trade battle between the U.S. and the rest of the world is raising the risk of a meaningful slowing in an otherwise vibrant American economy.

A ship carrying sorghum is literally riding the waves of the fractious relationship between China and the U.S. over trade.

Americans will pay more for everything from big-screen TVs to school supplies if the Trump administration follows through on threats to slap tariffs on Chinese imports, U.S. retailers warned.

Xi Jinping vowed to match Donald Trump blow for blow in any trade war. Now as one gets closer, some in Beijing are starting to openly wonder whether China is ready for the fight -- an unusually direct challenge to the leadership of the world’s second-largest economy.

For investors struggling to handicap whether U.S. President Donald Trump will stomach a full-blown trade war, some analysts boil the risks down to this: The dollar stands to lose.

Don’t be fooled by the S&P 500’s resilience during the latest eruption of U.S.-China trade tensions. Traders are bracing for fallout.

SPECIAL REPORT: Counting the Cost of a Global Trade War

The base case remains more trade skirmish than trade war, but the risks are growing. We look at what’s at stake and gauge the potential impact on the world economy.

GLOBAL INSIGHT: Trade War, Day 1 – Forecasting the Casualties

The announcement of tariffs on $34 billion of imports to come into force on July 6, and a further $16 billion expected soon after, looks genuine enough to conclude that the first shots have been fired. Here’s our thinking on where the casualties will fall.

CHINA INSIGHT: Tariff Troubles? Breaking Down Sector-Level Risks

Which sectors in China are most at risk from a trade war? Those with the weakest profit margins are least able to absorb the cost of tariffs. Those with the highest debt are worst placed to cope with any downturn in profitability.

Over the past three decades, the global auto industry has gotten, well, more global. Manufacturers built scores of factories outside their home countries to reduce exposure to currency swings, take advantage of cheaper labor and manufacture cars closer to buyers.

China doesn’t import enough from the U.S. to match Donald Trump’s tariffs dollar for dollar, but President Xi Jinping can still squeeze American companies in other ways in retaliation.

Washington’s action against Chinese imports Friday, and the response from Beijing, are hurting some U.S. industries more than others. Here’s a round-up of Bloomberg’s coverage of how the dispute is playing out in corporate America.

Chimerica is coming apart. The latest sign is the blowup over ZTE Corp., the Chinese telecommunications equipment manufacturer that violated the terms of a 2017 sanctions settlement, then lied about it.

China is reaching out to Europe with pledges to improve market access for companies in a charm offensive that contrasts with President Donald Trump’s escalation of trade disputes worldwide.

Economists are already running the numbers on the potential damage to the world’s second-largest economy -- at a time when it is anyway slowing due to an ongoing campaign to curb credit.

Move over Russia, Ukraine and Saudi Arabia. The U.S. looks set to join the group of countries embroiled in disputes at the World Trade Organization involving curbs imposed on national-security grounds.

The European Union is preparing punitive tariffs on iconic U.S. brands produced in key Republican constituencies, raising political pressure on President Donald Trump to ditch his plan for taxing steel imports.

The World Trade Organization is facing the greatest crisis of its 23-year existence. President Donald Trump doesn’t believe the WTO can handle the problems created by China’s rapid economic ascent and is fundamentally challenging the rules that govern international trade.

At issue is a little-used part of 1962 trade legislation sometimes called the "nuclear option" or the "big sledgehammer," which invokes national security to counter cheap imports. Such heavy tools can prompt a furious response from other countries, triggering complaints to the World Trade Organization.

To understand what a trade war means for America, go to the Mississippi. Follow the mud-brown river past Louisiana’s chemical plants, oil refineries, granaries, ports, and the rail networks and highways that spring from its fingers.

Farm districts helped put Trump in the White House and are the backbone of the GOP majorities in Congress. They’re also uniquely positioned to suffer from a trade war with China.

©2018 Bloomberg L.P.

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