IT IS becoming increasingly likely that the phoney trade war between America and China will develop into the real thing. On June 15th the Trump administration published two lists of Chinese products it plans to hit with tariffs of 25%, worth $ 50bn in 2018. The first will come into force on July 6th. The Chinese snapped back with their own list, laying out a retaliation of equal size. Then on June 18th President Donald Trump directed Robert Lighthizer, the United States Trade Representative (USTR), to draw up a further list of products worth $ 200bn that would face tariffs of 10%, and threatened yet another, covering an additional $ 200bn of goods, if the Chinese retaliated again. At least some of these tough words will probably turn into deeds. Both sides can expect to take casualties.
China regards the first round of American tariffs as a unilateral violation of global trading rules. It has lodged a complaint at the World Trade Organisation (WTO). But Mr Trump’s team maintains that China started…
