China has decided to retaliate if the United States publishes an additional list of tariffs on Chinese goods. The trade dispute has put markets and US businesses on edge. They fear a tariff battle will lead to price inflation and consumer debt, ingredients for an economic slowdown. Escalation of the trade war between the US and its major trading partners is seen as negative for US multinationals and the US labor market.

China’s rising demand for US products, such as food and energy, may also help some US regions that were previously negatively affected by globalization. A trade war may put US multinationals in danger, because multinationals account for one-fifth of total employment in the US. As the trade deficit is at the core of bilateral trade relations, US companies actually may have sold more to China than Chinese firms did to the US. The bilateral trade balance may be misleading because it does not capture the sales of goods and services by foreign firms' local subsidiaries. Countries such as Japan and South Korea have large businesses in China that export to the US.

Combining trade and foreign direct investment, the US actually ran a surplus against China. The US aggregate sales balance turned into a surplus against China in 2016 and 2017.