Fears of a trade war are rattling financial markets after US President Donald Trump proposed tariffs on about $60 billion worth of Chinese goods, arguing this was necessary to fight unfair trade practices. China has already responded by announcing tariffs on $3 billion worth of American products, from pork to steel pipes. This chart shows what US consumers actually buy from China, with cell phones and other household goods making up the largest single category:

Image: Reuters

The Trump administration has repeatedly complained about China’s $375 billion trade surplus with the United States as evidence of unfair competition, accusing it of stealing American companies’ intellectual property. But China argues it should not be punished just because it doesn’t buy more US products. This second chart shows how the trade balance has worsened significantly in China’s favour over the years. Imports from China have ballooned to $505.6 billion, while American exports have consistently lagged behind:

Image: Reuters

The threat of the trade war between two of the world’s biggest economies has hit financial markets as investors worry it will hurt the global economy. “China doesn’t hope to be in a trade war, but is not afraid of engaging in one,” the Chinese commerce ministry has said.