These Trade Jabs Don't Mean War. Yet.

So is a trade war upon us? President Donald Trump announced last week that the U.S. would place $60 billion worth of tariffs on Chinese goods, but what does that mean for the future of world trade? This conflict seems more likely to remain a modest spat than to blossom into a slugfest.

First of all, China responded to Trump’s $60 billion in tariffs with a $3 billion tariff retaliation, 1/20th of the initial amount. That’s a sign that China is seeking reconciliation rather than escalation. In any case, the $60 billion is less than 3 percent of China’s global exports, and the move could lower its gross domestic product by as little as 0.1 percent.