Charting the US-China trade battle

China EU USA trade war alliance Donald Trump President Xi

After the US imposed 25 percent tariffs on $34 billion worth of Chinese goods, China retaliated by imposing tariffs on the same amount of USA products. Another $16 billion of goods could follow in two weeks, Trump earlier told reporters, before suggesting the final total could eventually reach $550 billion, a figure that exceeds all of US goods imports from China in 2017. The U.S. exported 30 percent of its overall soybean production to China past year.

But U.S. stocks edged higher on Thursday, lifted by technology shares, amid hopes that American trade tensions with Europe may ease after German Chancellor Angela Merkel said she would back a reduction of European vehicle tariffs if Washington abandons its threatened higher auto levies.

The ministry called the USA actions "a violation of world trade rules" and said that it had "initiated the largest-scale trade war in economic history".

The United States will also impose 25 percent tariffs on another $16 billion in Chinese exports later this summer, something Beijing also said will not go unpunished.

Even if the Trump administration doesn't follow through on that threat, more individuals could be affected over time by the tariffs that kicked in Friday.

Analysts said that for companies with supply exposure to tariffs, they will move sourcing country of origin if they can; and if they cannot, they will pass on as much of the tariff cost as they can, or see a cut in margins. "The countdown is on as to what Trump will do next".

China said it would respond with measures of a "corresponding number and quality" if the United States produced a list of products that could be hit.

"We are in a trade war", he said. He said even if his United States business disappears entirely, he will be fine.

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Top trade representatives from China and the USA have held trade negotiations in recent months.

"Clearly the first salvos have been exchanged and in that sense, the trade war has started", said Louis Kuijs, chief Asia economist at Oxford Economics.

Washington slapped the first round of the new tariffs on bilateral imports worth $50 billion for alleged intellectual property and technology theft, while Beijing quickly struck back on an equal amount of American products.

"If we didn't have a tariff and we could sell on a free market, you know, the Chinese people would pay us $8.50, but if you got a tariff, a 25-percent tariff on that, it brings that price back up to $10 dollars", said Cannatella. But many consumer industry groups say American consumers are likely to bear the brunt of the fight.

Gao said China's foreign trade was expected to continue on a stable path in the second half of the year, though investors fear a full-blown Sino-American trade war would deal a blow to Chinese exports and its economy. That conjures the image of this being a cool, calm, collected game of chess on both sides: Washington and Beijing.

United States tariffs on $34bn (£25.7bn) of Chinese goods have come into effect, signalling the start of a trade war between the world's two largest economies.

"Tariffs not only hurt our farmers, ranchers and aeroplane manufacturers but they also harm every American consumer. At that point, the U.S. will be more interested in negotiations, and the Chinese side will also want to come to the table".

Distillers are anxious that retaliatory tariffs, not only from China but Europe and Canada as well, could stunt their sales and slow expansion and hiring plans.

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