Opening shots were fired at 12.01am this morning as Washington stuck to its deadline and began imposing tariffs on $34bn of Chinese goods.
"In order to defend the core interests of the country and the interests of the people, we are forced to retaliate", the Chinese Commerce Ministry said in a statement shortly after the tariffs took effect. "Tariffs will negate gains made by the public from tax reforms and deregulation, push up US production costs, damage the competitiveness of businesses and their workers, and force companies to look outside the U.S.to maintain production".
Flags of USA and China are placed for a meeting between Secretary of Agriculture Sonny Perdue and China's Minister of Agriculture Han Changfu at the Ministry of Agriculture in Beijing, China June 30, 2017.
Some economists warn that an all-out trade war would put the brakes on the US economy by eroding business confidence, interrupting supply chains and increasing costs of imports to USA companies and consumers.
Trump has for years slammed what he describes as Beijing's underhand economic treatment of the United States, with the U.S. trade deficit in goods with China ballooning to a record US$375.2 billion last year. A Chinese government spokesman has said Thursday, July 5, 2018, that Beijing "will not bow in the face of threats and blackmail" on the eve of US tariff hikes and will defend its interests. At the same time, Beijing has reiterated it will roll out tit-for-tat tariffs as tensions rapidly escalate. Trump said Thursday that another $16 billion of tariffs are expected to go into effect in two weeks, before ratcheting up the stakes to warn that measures totaling $500 billion in Chinese goods could soon come into force. "So we have 50 plus 200 plus nearly 300".
In addition to Friday's tariffs and in response to China's retaliation in June, Mr Trump has ordered tariffs on $200bn worth of imports and threatened tariffs on another $200bn.
It's also bigger than the $505 billion of goods that the United States imported from China a year ago. These tactics include cyber-theft and requiring American companies to hand over technology in exchange for access to China's market.
With only $130 billion in USA imports to retaliate against, Beijing has said it will take "qualitative" and "quantitative" measures against the United States, triggering fears it could cripple the operations of U.S. multinationals in China.
China's commerce ministry accused the USA of launching the "largest trade war in economic history-".
"After the United States unfairly raised tariffs against China, China immediately put into effect raised tariffs on some USA goods", foreign ministry spokesman Lu Kang told a daily media briefing on Friday afternoon.
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Oranges, the quintessential Florida product, are listed on a list of retaliatory tariffs published by the Chinese government. Officials in Beijing reject accusations of theft and say foreign companies have no obligation to hand over technology.
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Friday's development comes as Europe, Mexico and Canada - some of America's closest allies -- are engaged in their own trade battles with the U.S.
The American Chamber of Commerce in China appealed to both sides to negotiate a settlement.
But, with the GOP facing strong political headwinds ahead of November's mid-term elections, China's countermeasures left both Trump and Republican lawmakers increasingly vulnerable to voters who appear likely to boost the fortunes of opposition Democrats. An analysis of over four dozen targeted USA products showed that prices were little changed on Friday afternoon from earlier in the week.
For the time being, analysts say it's hard to see Washington or Beijing backing down in the dispute.
"China will not bow in the face of threats and blackmail", he added.
Global stock markets managed small gains Friday, overcoming earlier wobbles prompted by China and the United States firing opening salvos in a trade war that pits the world's two biggest economies against each other.
And enduring the pinch isn't going to pay off. Protectionism has historically proven to be destructive for the global economy and won't achieve what the Trump administration is trying to accomplish, said Hsu. "For example, my auto is from America".
Back in 2015, Chinese President Xi Jinping announced an ambitious plan for Chinese companies to dominate the hi-tech industries of the future - including biotechnology, robotics and new-energy vehicles - called "Made in China 2025".
"I will try my best to support domestic products".