On trade wars China is playing a careful game, but it holds more cards than Trump

Beijing knows the US presidents needs at least the appearance of a thriving economy before next year's election

At the beginning of September, Chinese president Xi Jinping incensed Donald Trump by imposing a flurry of new import duties on US goods, including semiconductor chips and mobile phones.

It was a retaliation too far for the US president, especially when the stock market reaction was to send shares in America's second most valuable company at the time, Apple, tumbling by almost 5%. For many observers it was just another skirmish in the tit-for-tat trade war that had rumbled on for 20 months. But in Washington it came as a shock, and was the driving force behind Trump's premature announcement the following month of an interim deal - one that after much wrangling finally came to fruition, or at least appeared to, last week.

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