The events have cast doubt on the conventional wisdom, dominant just 10 days ago, that the world's two biggest economies were edging toward a compromise on trade.
The renewed hostilities sent stocks tumbling around the world. The Dow Jones industrial average was down more than 600 points, or more than 2%, in midday trading Monday.
Here's a look at what's happening:
WHAT WENT WRONG?
For weeks, the talks seemed to be making slow but steady progress, and financial markets had priced in a peaceful resolution to the trade dispute. But on
WHAT ARE THE
Trump has also complained repeatedly about America's huge trade deficit with
Last July, Trump began gradually slapping tariffs on Chinese imports. After Friday's tariff increase,
Until the blowup of the past week, the two countries appeared to be making progress.
But stumbling blocks remained — even before the
WHAT ARE THE PROSPECTS FOR A RESOLUTION?
Cloudier than they were. Both countries still have an incentive to reach a deal.
The trade tensions have also rattled financial markets, jeopardizing a
Still, business groups and congressional
Both countries have indicated that more talks are likely. Top
Kudlow said that Trump and Xi may meet in late June at the G-20 summit in
The two countries have given themselves some breathing room to negotiate. The higher Chinese tariffs don't kick in until
WHAT IS THE ECONOMIC FALLOUT?
Even before the latest tariff increases, forecasters at the
The latest tariff increases could intensify the economic pain.