US President Donald Trump has fired another shot in the trade war with China - but an analyst says the "game of chicken" could catch New Zealand in the middle.
The US slapped tariffs on $50 billion worth of Chinese goods earlier this year. Now it plans to impose a new 10 percent tariff on $200 billion of Chinese goods, increasing to 25 percent by the end of the year.
That will hike the price of things like air conditioners, furniture and lamps, handbags and rice - 6000 products in total. And it's not just finished goods, it's componentry for manufacturing too.
"If you're a US consumer you'd be quite concerned because Chinese products are very popular," says Auckland University Associate Professor Stephen Hoadley.
The tariffs are designed to punish China for what the US says are unfair trade practices, and allegations of intellectual property theft.
"The losses have been staggering for so many years for our country and we just can't let that happen anymore," Mr Trump says.
"It should have been done by other presidents and it's a disgrace that it wasn't done."
Prof Hoadley says China plans to be a technology superpower, with electric vehicles, space travel and biotechnology under its programme called Made In China 2025 - and that has the US worried.
"Trump is gambling that the Chinese will be hurt more. I don't think so," he warns.
Chinese products are still more attractive because their currency is lower, making them cheaper. There could be a short-term upside for New Zealand if China diverts products to other markets.
"This might have a positive effect on New Zealand, that is, the more products on the market, usually the prices go down," Prof Hoadley says.
But if the US economy tanks, or the Chinese economy suffers, they won't buy so many of our exports so we'll lose out in the longer term.
China has already vowed to retaliate with new import taxes on $60 billion of American goods.
Newshub.
