WASHINGTON (AP) So is this what a trade war looks like?
The Trump administration and Chinas leadership have imposed tens of billions of dollars in tariffs on each others goods. President Donald Trump has proposed slapping duties on, all told, up to $550 billion if China keeps retaliating and doesnt cave in to U.S. demands to scale back its aggressive industrial policies.
Until the past couple of years, tariffs had been losing favor as a tool of national trade policy. They were largely a relic of 19th and early 20th centuries that most experts viewed as mutually harmful to all nations involved. But Trump has restored tariffs to a prominent place in his self-described America First approach.
Trump enraged such U.S. allies as Canada, Mexico and the European Union this spring by slapping tariffs on their steel and aluminum shipments to the United States. The tariffs have been in place on most other countries since March.
The president has also asked the U.S. Commerce Department to look into imposing tariffs on imported cars, trucks and auto parts, arguing that they pose a threat to U.S. national security.
Here is a look at what tariffs are, how they work, how theyve been used in the past and what to expect now:
Q: ARE WE IN A TRADE WAR?
Economists have no set definition of a trade war. But with the worlds two largest economies now slapping potentially punishing tariffs on each other, it looks as if a trade war has arrived. All told, Trump has threatened to hit as much as $550 billion worth of Chinas exports to the U.S. with punitive tariffs. Thats more than the $506 billion in goods that China shipped to the United States last year.
Its not uncommon for countries even close allies to fight over trade in specific products. The United States and Canada, for example, have squabbled for decades over softwood lumber.
But the U.S. and China are fighting over much broader issues, like Chinas requirements that American companies share advanced technology to access Chinas market, and the overall U.S. trade deficit with China. So far, neither side has shown any sign of bending.
Q: SO WHAT ARE TARIFFS?
Tariffs are a tax on imports. Theyre typically charged as a percentage of the transaction price that a buyer pays a foreign seller.
In the United States, tariffs also called duties or levies are collected by Customs and Border Protection agents at 328 ports of entry across the country. Proceeds go to the Treasury. The tariff rates are published by the U.S. International Trade Commission in the Harmonized Tariff Schedule, which lists U.S. tariffs on everything from dried plantains (1.4 percent) to parachutes (3 percent).
Sometimes, the U.S. will impose additional duties on foreign imports that it determines are being sold at unfairly low prices or are being supported by foreign government subsidies.
Q: DO OTHER COUNTRIES HAVE HIGHER TARIFFS THAN THE UNITED STATES?
