China imported only $130 billion in goods from the US a year ago but could retaliate through other means including regulatory moves and investigations of USA companies.
According to the IHS Markit Chief Economist, Rajiv Biswas, United States aims for specific key manufacturing export industries like cotton, steel, and Refrigerators.
President Donald Trump accuses China of unfair trade practices that benefit its firms while hobbling US companies and creating an outsized trade deficit for the United States. "And U.S. producers who rely on economies of scale will have to raise their prices if retaliatory measures cause them to lose access to overseas markets".
The spiralling conflict stems from Washington's complaint that Beijing steals or pressures companies to hand over technology and concerns that plans for state-led development of Chinese champions in robotics and other fields might erode American industrial leadership.
The U.S. trade deficit in goods with China ballooned to a record $375.2 billion a year ago, stoking his anger over trade policies.
Members of Congress are increasingly questioning Trump's aggressive trade policies, warning that tariffs on imports raise prices for consumers and expose USA farmers and manufacturers to retaliation overseas.
President Donald Trump has threatened to tax as much as $US550 billion in Chinese products - an amount that exceeds America's total imports from China past year.
The latest news on the trade front came after Washington slapped 25% tariffs on $34 billion of Chinese imports last week, a move against which China immediately retaliated with matching tariffs on the same amount of USA exports to China.
While Chinese shares regained some heavy losses of July 11, with the Shanghai Composite index rising 2.2 percent, the yuan fell against the dollar following the central bank's weakest daily fixing in almost a year and Washington's fresh tariff threats.
If the Chinese want to keep up the tit-for-tat strategy, they'll have to come up with other ways of inflicting economic pain. The escalation of US tariffs on China comes in the wake of American trade battles with Europe, Canada, and Mexico and amid President Donald Trump's visit to Brussels for a North Atlantic Treaty Organisation summit.things up, better than ever before, but it can't go too quickly.
"The behaviour of the U.S. is hurting China, hurting the world and hurting itself", a spokesperson for China's commerce ministry said in a statement. "It did this without any global legal basis or justification", stated US Trade Representative (USTR) Robert Lighthizer.
The Chinese government, however, called it "totally unacceptable" and said it would take unspecified countermeasures.
Coors Brewing is on the record saying they believe the trade war will impact the price of beer.
"Tariffs are taxes, plain and simple".
The U.S. has long criticized China, accusing it of unfair trade practices and appropriating intellectual property.
The US complains that China uses predatory practices in a push to challenge American technological dominance.
Louis Kuijs, Hong Kong-based Head of Asia Economics at Oxford Economics, said while he expects China to strongly condemn the US moves, its policy response is likely to be limited for now.
On Tuesday, the president made good on his threat with the announcement of the new tariffs.