BEIJING �� With new tariffs by the United States and China to go into effect Monday, there is no improvement in sight for relations between the two nations.
$200 billion worth of Chinese products will be subject to tariffs on top of the $50 billion in goods on which tariffs have already imposed.
The combined $250 billion in products subject to tariffs is almost half the value of imports from China last year. Meanwhile, $110 billion worth of goods from the U.S. will become subject to Chinese tariffs around the same time, or about 70 percent of the value of goods it bought from America in 2017.
"We don't want to, but we probably will have no choice," Trump said of the tariff escalation at the Oval Office last week. "We're making a lot of headway with China."
China Saturday called off trade talks with U.S. officials that had been planned for next week. U.S. State Department sanctions Thursday against China's defense agency and its director contributed to the decision, people familiar with the matter said. There's a growing consensus in Beijing that substantive talks will be possible with the Trump administration only after U.S. midterm elections in November, those people said.
The U.S. products that China has targeted for retaliation have changed over time, shifting from cars and agricultural commodities to industrial goods.
In the initial round, soybeans and most of China's imports of U.S. cars were hit.
In the second round, the focus has widened and shifted more to capital goods and other imports, raising the cost for industrial companies. That's partly because many of the goods traded in large volumes with the U.S. were already covered by the first round, so it's getting harder to find things to impose new tariffs on.
That can be seen in the number of goods affected. In round one there were 659 U.S. imports hit with the percent tariff, while this time there are 5,207 individual items on which China plans to impose a 5 percent or 10 percent levy.
But there are still tens of billions of dollars worth of U.S. goods that haven't been hit with extra import taxes yet �� many in areas where China is unable to compete with Western countries, such as planes, computer chips, and pharmaceuticals.
Even as companies like aircraft-maker Boeing Co. bank on the growing Chinese market, tariffs, or the threat of them, could cause Chinese companies and consumers to spend less on U.S. goods and more on substitutes from home, Japan, the European Union, or elsewhere.
There are already signs of that happening in energy markets. This round of tariffs will include levies on U.S. liquefied natural gas.
In the U.S., companies complain that the time between the announcement of tariffs and their implementation is too short to arrange alternatives. And a protracted trade war would fuel inflation in the U.S., particularly as tariffs are added to categories such as furniture, apparel and technology, according to analysts at Bloomberg Intelligence.
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