What Happened: The second day of the latest round of trade negotiations between China and the United States ended May 10 without a deal, Bloomberg reported, dashing hopes for a quick de-escalation of their trade war following Washington's tariff hike on $200 billion worth of Chinese goods. Both sides have broadly agreed to a future meeting in Beijing without setting a specific date.
Why It Matters: The recently announced U.S. tariff hike — combined with the potential for retaliatory measures from Beijing — has significantly escalated the trade war, which had recently begun to show signs of easing. The White House has reportedly given Beijing up to four weeks to address its outstanding issues before pursuing additional tariffs on the remainder of Chinese imports not covered by previous rounds of U.S. tax hikes.
Background: As of last week, China and the United States had reportedly entered the final stage of drafting a 150-page trade deal. But negotiations made a sharp turn on May 5, after Trump threatened to increase tariffs on Chinese goods via Twitter. Trump's announcement was allegedly in response to Beijing backing away from early promises over legal mechanisms to enforce the structural issues of the deal, such as technology transfers.