Twenty-five percent USA tariffs took effect at midnight and affect more than 800 Chinese products - including industrial machinery, office equipment, electronics, medical devices and vehicles.
Beijing's commerce ministry, in a statement shortly after the USA deadline passed on Friday, said the world's No. 2 economy was forced to retaliate by placing jacked-up 25 percent tariffs on U.S. cars, soybeans and lobsters. And they have assumed a direct impact on China's economic growth in 2018 of 0.1-0.3 percentage points, and a somewhat lower effect on US growth.
What Our Economists Say As a candidate in 2016, Donald Trump won support with a promise to redress an unbalanced trade relationship with the rest of the world.
If China goes ahead with tariffs on US plastics, it "could have a very clear negative effect on resin producers and others here to support the huge increase in production - railroads, truckers, pallet manufacturers and ocean carriers", Levine said.
Under a full-blown trade war in which the USA slaps 10% tariffs on all other countries and they respond, the economists reckon U.S. growth would slow by 0.8 percentage point by 2020.
The trade war that would never happen officially began this Friday. The reality is that trade wars are damaging to everyone, not just the participants, and no one will "win".
The office of the US Trade Representative announced a product exclusion process for Chinese products subject to Section 301 tariffs, seeking to soften the blow on US companies a little.
Until now, only $3bn of tariffs have taken effect, but President Trump has threatened new tariffs on many occasions. Asian equities wobbled but also managed to end up.
Beijing yesterday also lodged a complaint with the World Trade Organisation against the USA tariffs. But many consumer industry groups say American consumers are likely to bear the brunt of the fight. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey. "Such inconsistent information will leave many investors confused", said Zhu Hong, minister-counsellor for economic and commercial affairs at China's embassy in the United States.
"Soybeans are the top agriculture export for the United States, and China is the top market for purchasing those exports", Heisdorffer said in a statement. Medical imaging scanners such as CT, MRI, and ultrasound systems were on a list of 1,300 products the administration said would be slapped with tariffs.
The American Soybean Association (ASA) said in a statement that soybean farmers "rely heavily" on exports to China, and said that they lobbied Trump to reconsider the tariffs.
China's Commerce Ministry accused the USA of "bullying" and igniting "the largest trade war in economic history".
"You have another 16 (billion dollars) in two weeks, and then, as you know, we have $200 billion in abeyance and then after the $200 billion, we have $300 billion in abeyance. Ok?"
"We just want what we had before", he said.
"In effect, the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China", the state-run China Daily newspaper said in an English language editorial on Friday.
JPMorgan Chase & Co. economists warn the biggest risk may come from the indirect impact of tightening credit conditions and business confidence, reducing scope for investment and hiring while undermining financial markets.
USA officials have warned President Trump that the retaliatory tariffs will likely have a major impact on consumers and manufacturers by making imported goods and their component parts more expensive.