Chinese flags and American flags are displayed at a business in Beijing. Washington and Beijing’s renewed feud over Hong Kong's autonomy is increasing the risk for more tariff hikes and other trade salvos between the world's two largest economies.
Rising bilateral tensions stemming from Beijing's proposed national security legislation for Hong Kong are increasing the risk that the "phase one" trade deal between the United States and China will collapse before the end of 2020. The deal itself may still officially exist, but tit-for-tat escalation on tariffs and trade measures will render it functionally dead. Further retaliation by the United States over the Hong Kong legislation also risks triggering Chinese countermeasures beyond trade policy. The last six weeks have seen the United States take several significant steps against Chinese officials and in response to Beijing's policies: U.S. President Donald Trump has said on several occasions that he will make China "pay" for the COVID-19 outbreak due to Beijing's negligence and lack of transparency, the most extreme being stripping away sovereign immunity from China in COVID-19 cases.
