US and China playing a gigantic game of chicken | Larry Elliott

If Trump withdraws his threatened tariffs, the Chinese have said they will do the same

When Donald Trump tweeted that "trade wars are good and easy to win" most commentators thought the US president was merely sabre-rattling. The prospect of a return to full-scale 1930s protectionism was thought to be minimal. Cooler heads would prevail.

A month on, the chances of a trade war between the US and China have significantly increased. Trump has said he will slap a 25% tariff on $50bn of Chinese goods and Beijing has now responded in kind. It has drawn up a list of US goods also worth $50bn which it will target if the White House goes ahead with its action.

Related: China retaliates to Trump tariffs with new levies on US products

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