What happens when the world’s two biggest economies turn on each other

America and China, the world’s two largest economies, may soon be in a trade war.

Leaders from the two nations have announced tariffs on each other. But the real fear among businesses, investors and lawmakers: Escalation.

This could just be the beginning — “the first of many” trade actions, as President Trump put it Thursday.

Trump announced plans Thursday to impose tariffs of 25% on $50 billion of Chinese exports. On Friday, Trump’s global tariffs on steel and aluminum, which includes China, went into effect. Responding to those two latter tariffs, China said it would impose tariffs on $3 billion of US exports to China.

If it ends there, the skirmish is unlikely to have serious global implications. But the pain of higher costs and prices will be felt by workers, businesses and consumers, both directly and indirectly.

Here’s what we know, and what might be in store in the future.

The United States will impose a tariff of 25% on steel coming from China and a 10% tariff on its aluminum. Most nations will be subjected to same US-imposed duties.

The Trump administration will also slap a 25% tariff on a range of unannounced products from China, including, but not limited to, communication technology, aerospace, information, and machinery. This comes after a US investigation concluded China systematically discriminated against US tech companies operating in that country.

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