With the US and China now actively engaged in several rounds of tit-for-tat tariffs and retaliations, it is easy to lose track of a) where we currently are in the escalating trade standoff and b) what has actually been implemented.

As a handy guide, Goldman reminds us that in the latest overture by the US on June 18, the White House announced that it would impose 10% tariffs on an additional $400 billion of products from China if intellectual property policies and related issues are not addressed or if China retaliates; China vowed to retaliated immediately.

Put in context, this would potentially involve tariffs on two successive rounds of $200 billion each. And since previously, President Trump had previously proposed a 25% tariff on the second round of $100bn in imports from China, this latest proposal amounts to a net $300bn increase in products affected.

If implemented this would raise the total amount of tariffs the Trump administration has proposed from around $500bn to nearly $800bn, or about 4 times the cumulative amount that had been proposed as of a month ago, before President Trump proposed tariffs on global auto imports on national security grounds.

All of this is summarized in the chart below, which perhaps more importantly also shows that up until now, the amount of US imports actually subject to implemented tariffs is virtually negligible compared to what has been proposed. However, that may change very soon as the first round of the trade war with China takes effect on July 6.

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As a first bonus chart, Goldman shows how the first rounds of 25% tariffs would compare with hypothetical later rounds. It finds that in the first round of $34bn in imports, imports from China account for only 8% of total imports in the affected categories, and 23% of imports from low-cost countries. In subsequent rounds, these shares rise, and if the White House moved forward with the proposed tariffs on an additional $200bn in imports, imports from China would account for more than half of total imports from low-cost countries, leaving little room for substitution from other US trading partners.

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Finally, here is Goldman's estimation of the potential composition of the next group of $200bn in imports that the White House might impose tariffs on. It is meant to reflect the basics of the USTR process, which aims tariffs at import categories where China represents a small share, ideally less than 1/3 of total imports.

Columns 1 and 2 show US imports from China in each category of goods on which USTR has already proposed to apply a 25% tariff. The third and fourth columns, under “Potential Retaliation,” show value for each category we estimate as most likely to be subject to a 10% tariff should the US choose to impose tariffs on an additional $200bn of goods. In our view, the US is likely to respond first with tariffs on remaining goods that are relatively easy to substitute (column 3). A low share of imports from China (column 5), a higher share from low-wage countries excluding China (column 6), and a lower share of goods from high-wage countries (column 7) would suggest relatively easy substitutability and thus a higher likelihood of being subject to tariff in the next round.

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