Over the last few months, the trade war between the US and China has been hotting up, with a range of new export controls and other restrictions brought in on both sides.

In total, the US has raised tariffs on around $450 billion of trade since the initial moves were made by the administration of president Donald Trump. While initial hopes were that Joe Biden would take a different approach since entering the White House in 2021, these have proven to be unfounded, with the Trump tariffs largely kept and even expanded on.

Overall, US tariffs affect around 18 percent of its Chinese imports, equivalent to 2.6 percent  of its GDP, while China's retaliatory measures impact 11 percent of its own imports, or 3.6 percent of its GDP.

So as the world's two largest economies continue to enact restrictions and pressure allies around the world to do the same, let's take a look at what the main disputes are, the impact this is having on bilateral trade between the two parties and what the coming months and years are likely to hold.

Hi-tech sector a key battleground

One of the biggest areas affected by the dispute is the hi-tech sector, with semiconductors a key focus for the US. Despite China's large electronics manufacturing industry, it has little capability to produce the most advanced chips on its own, and so has long been reliant on imports.

However, last year the US enacted the first in a series of tough export controls that have severely restricted shipments. This initially targeted the most powerful items, but there are expectations that this could be expanded in the near future, potentially covering new, less-powerful chips developed by the likes of Nvidia specifically to avoid the previous controls.

In response, China has imposed its own restrictions, focusing on some of the key raw materials such as rare earth minerals that are required for chip manufacturing. While not official bans, it does mean exporters will need to complete rigorous approvals processes before being allowed to move goods, and enables Beijing to keep a close hold over shipment volume.

US-China trade on the decline

The growing tensions are also reflected in overall trade figures between the two nations. Although 2022 set new records for trade, with data from the US Bureau of Economic Analysis finding US imports of goods from China grew by 6.3 percent year-on-year to reach $536.8 billion and exports to China rose by 1.5 percent year-on-year to reach $153.8 billion, 2023 has seen a different story.

Fobres noted recently that as of May this year, China accounted for 13.35 percent of all US imports - down from around 20 percent five years ago. It added the biggest declines have been seen in areas such as computers, cellphones and children's toys.

The latest figures from China's authorities backed this up, with trade values in June suffering their biggest decline in almost three years.  A 24 percent year-on-year drop in exports to the US was said to be one of the biggest contributors to this.

There may also be knock-on effects to other countries, both positive and negative. For instance, the Netherlands and Japan have followed the US' lead of chip export restrictions, while several countries have emphasized the importance of trade diversification.

Meanwhile, one study by CEPR noted that some other countries have been able to boost their exports to the US as a result of the dispute. The biggest winners include Vietnam, Thailand, South Korea and Mexico. 

The research noted: "Overall ... the trade war generally enhanced trade opportunities for most countries rather than just causing shifts in trade patterns across destinations."

Will in-person talks improve relations?

Despite the frosty relations, efforts to resolve some of the disagreements are ongoing. Earlier this month, US trade secretary Janet Yellen made a visit to Beijing, where she met with officials including vice-premier He Lifeng.

Sher emphasized the need for better communication between the two sides and stressed that the US believes there is room for both countries to thrive.

Ms Yellen added Washington wants to see a "dynamic and healthy global economy that is open, free and fair, not one that is fragmented or forces countries to take sides". However, she also warned that the US will continue to push back against what it views as unfair trade practices from Beijing.

The trade secretary's visit followed on from a trip by secretary of state Anthony Blinken in June, while high profile business leaders including Bill Gates and Elon Musk have also visited China recently.

However, while such efforts may be vital in keeping talks going, some commentators have suggested the rift is only set to grow in the coming months.

For instance, Cameron Johnson, a partner at consulting firm Tidal Wave Solution, told the South China Morning Post: “With the election season in 2024, the chance of relations deteriorating is high, especially with US presidential election candidates attacking the Biden administration."

He added that diplomatic efforts now may help keep further deterioration to a minimum.