The unintended consequences of Trump’s trade war with China

Chinese factory claims it's making Trump's 2020 campaign flags amid trade war talk

In addition to the tariffs on $34 billion of Chinese goods that began at 12:01 a.m. Friday in Washington, an additional set of duties on $16 billion of goods against the nation is still pending.

Commodity prices continue to fall as the US faces retaliatory tariffs from Mexico, Canada, China and the European Union.

China implemented retaliatory tariffs on US goods just after noon on Friday, immediately after the USA began collecting additional tariffs on Chinese imports, the official Xinhua News Agency reported, citing an unnamed spokesperson from China's General Administration of Customs.

Current prevailing thought that if the tariffs go no further at this point then there will be only limited damage to the U.S. and world economies and that the markets can absorb what's been done up to this point with minor corrections. Chinese companies and investors girded for the worst, while economists cautioned any impact on the economy would be minimal.

The US trade deficit in goods with China ballooned to a record $375.2-billion past year, further stoking Trump's ire.

The official newspaper China Daily accused the Trump administration of "behaving like a gang of hoodlums" who could do damage to the global economy unless other countries stop them.

"China promised that it would not fire first, but it has been forced to take necessary measures to defend the core interests of the country and its people", the statement said.

Previously, Trump had threatened up to $400 billion in additional tariffs should China follow through on its plans to retaliate against the initial USA tariffs on Chinese goods including autos, computer disk drives, pump and valve parts and light-emitting diodes.

Still, Chinese investors and companies were anxious. Soy bean prices fell to almost 10-year lows this week in anticipation of China's response.

"One of the biggest competitive advantages of Chinese exports is their low price".

"We strongly urge the administration to abandon its plans for tariffs on another $200 billion in Chinese imports, which would destroy thousands of American jobs and raise prices on virtually everything sold in our stores". The European slammed the move as protectionism and slapped counter-measures on USA products. The rest of the world would suffer collateral damage, even if the U.S. were to refrain from penalising imports from other countries.

American Soybean Association President John Heisdorffer, a soybean producer from Keota, Iowa, emphasized the importance of the Chinese market and the investment US farmers have devoted to cultivate the Chinese market. "If we can seize our own market, we will be less affected by the trade war", said a spokesperson for Topsun, a furniture manufacturer in Zhejiang province.

The U.S. pork industry previous year sent $1.1 billion worth of product to China, making it the third largest export market after Japan and Mexico.

Minutes after the USA put its long-threatened duties into effect just after midnight on Friday morning, a spokesperson for China's ministry of commerce said it would be matching them dollar-for-dollar.

The Trump administration is confronting Beijing over development tactics it says include stealing or pressuring foreign companies to hand over technology.

Beijing's response came within minutes as it imposed a series of levies on a similar quantity of USA imports.

China's economy is no longer as dependent on exports. Many countries, including India, have complained that there are too many restrictions on American exports that they actually want, and Washington simply wants to unload its excesses, such a chicken legs, on countries that don't particularly need them. China is our top market, importing 31 percent of our crop past year.

Mr Trump has already imposed tariffs on imported washing machines and solar panels, and started charging levies on the imports of steel and aluminium from the European Union, Mexico and Canada.

Meanwhile, Russia said it would introduce extra duties on a range of products imported from the US. "The impact on the USA political environment is, however, likely to be far greater", he said.

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

Trump this month said he doubted he could achieve a deal he likes until after the USA midterm elections in November.

"But the tariffs will bring double-lose results".

"Retailers support a level playing field for America on the global stage, but punishing American families and the millions of American workers whose jobs are supported by trade is not the way to strengthen our trading relationships", Quach said.