Beijing wasted no time in striking back at Washington’s latest round of tariffs on Chinese imports by announcing a new list of US products that would be subject to punitive action, as the world’s two largest economies edge ever closer towards an all-out trade war.

China’s State Council said on Wednesday it planned to impose additional tariffs of 25% on 106 US products imported into the country, including soybeans, airplanes, cars, and chemicals, CCTV reported. The Ministry of Commerce said the import value of the goods on the list in 2017 was $50 billion. The effective date will depend on when the U.S. action takes effect.

Beijing’s retaliation came just hours after the United States Trade Representative Office released details of hundreds of Chinese imports worth about $50 billion that it planned to hit with 25% tariffs, with the emphasis on industrial and hi-tech goods.

“China’s response was tougher than what the market was expecting – investors didn’t foresee the country levying additional tariffs on sensitive and important products such as soybeans and airplanes,” said Gao Qi, Singapore-based strategist at Scotiabank. “Investors believe a trade war will hurt both countries and their economies eventually.”

As reported last night, the US list covers 1,300 items, including high-definition colour video monitors, electromagnets used in MRI machines, aerospace products, and machinery used to make processed textiles, printed products and food.  Beijing responded immediately to the US announcement saying it would “take corresponding measures of equal scale and strength against US products in accordance with Chinese law”.

USTR developed the tariff targets using a computer algorithm designed to choose products that would inflict maximum pain on Chinese exporters, but limit the damage to U.S. consumers. A USTR official said the list got an initial scrub by removing products identified as likely to cause disruptions to the U.S. economy and those that needed to be excluded for legal reasons.

…click on the above link to read the rest of the article…