China said this week it would impose higher tariffs on most U. But Beijing is mindful of a possible nationalistic backlash if it is seen as conceding too much to Washington.

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Agreeing to U. Of the retaliatory options available to China, none come without potential risks. Related Coverage.

See more stories. Based on U. In contrast, U. The only other items Beijing could tax would be imports of U. But China does not have as much leverage over the United States as it might seem because large parts of that surplus are in tourism and education, areas that would be more difficult for the Chinese government to significantly roll back, James Green, a senior adviser at McLarty Associates, told Reuters.

China is more likely to further erect non-tariff barriers on U. Trade Representative official at the embassy in Beijing. Trade analysts say China could reward other global companies at the expense of U. It is partly the result of Trump's tariffs.

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So he can use that to claim that his war on trade with China has been successful, which should give him some space not to demand the impossible in these extraordinary times. Does that mean that a tariff hike or other measures to inflict pain on China are in the offing? Not immediately, in our view. Last year, Trump could shrug off critics who said his tariff hikes hurt the stock market and caused a recession in manufacturing by pointing to all time highs for stock market indices and record low unemployment rates.

But this time, the overall economy is in a devastated state.

So from an economic point of view, it would be very risky for Trump to take measures that are not welcomed by most American businesses and consumers. He would have little defence if he were to be accused of driving the economy into an even deeper hole. Nevertheless, the risk of Trump taking new protectionist measures has definitely increased.

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Trump is currently not doing very well in the polls. As the economy is in a terrible state and will still be far from healthy at election day, Trump could give preference to non- economic considerations.

If the President thinks that China offers a scapegoat for the current crisis and could potentially boost his re-election chances, an announcement of new protectionist measures is a serious option, particularly if the conflict with China about the search for the origin of the Covid virus escalates. Trump could then portray himself as a global leader. Cookies are small, simple text files stored in your computer, tablet or mobile phone when you visit a website or use an app.

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I agree with the use of all cookies. I want to use limited functionalities on this website and agree to the use of strictly necessary cookies only. I understand that some functions will not be available. In this article Return of the threats Non-tariff measures Bark or bite as well? Blame for the economic crisis Other reasons for hiking tariffs. Return of the threats The possibility of another trade war is back.