"People really need to get used to a world with tit-for-tat tariffs in place between the two largest economies", said Wendy Cutler, a former USA trade negotiator.
China said on Wednesday, August 8, it will impose 25% tariffs on a further $16 billion of USA goods, making good on its promise to retaliate against new American levies. The additional tariffs will go into effect on August 23.
China responded by promising to hit $60 billion worth of U.S. goods coming into the country with tariffs. So far, despite the rhetoric, only $37bn worth of imports into China and the USA have actually been affected. The tariffs will come into effect simultaneously with the United States ones, at 12.01 pm in Beijing, according to the statements.
President Donald Trump has suggested he may tax effectively all imports of Chinese goods, which reached more than US$500 billion past year.
A Chinese Ministry of Commerce spokesperson wrote in a brief statement on Wednesday that the U.S. action was "once again overriding domestic law and worldwide law", labelling it "a very unreasonable practice". The U.S. Trade Representative's Office is reviewing tariffs on a further US$200 billion in Chinese imports and those duties could start once a comment period ends on September 6. China has responded with retaliatory tariffs of its own.
An earlier round of tariffs that went into effect on July 6 applied to $34 billion in imports.
Due to the rising trade tension between China and the United States, the trading arm of Chinese state oil major Sinopec is said to have suspended imports of crude oil from the United States. The list is heavy on industrial products such as steam turbines and iron girders. But it was 11 percent higher than in the same month previous year.
China has threatened to retaliate on any additional USA tariffs tit-for-tat.
The Trump administration has proposed 10 percent tariffs on an additional $200 billion in Chinese imports - which ACC estimated includes $16.4 billion in chemicals and plastics.
Administration officials believe that the $505 billion Americans spend on Chinese products each year gives them leverage over China.
"We'll know China is really feeling the pressure when they start stirring nationalist sentiment or calling for boycotts against USA", said Bruce Andrews, managing director of Rock Creek Global Advisors. That's 24% of all Washington exports according to the Washington Department of Agriculture.